Obama administration eyes energy markets for fraud

[DainBramaged]

Source: Reuters

With U.S. gasoline pump prices soaring, the Obama administration on Thursday unveiled a working group of federal agencies to probe potential fraud in the energy markets.

The White House is worried that if average gas prices rise above $4 a gallon, the economic and political fallout could dominate next year's presidential campaign and drown out President Barack Obama's message of economic recovery.

Obama said there was no "silver bullet" to tame gasoline prices, but said he asked U.S. Attorney General Eric Holder to assemble a team of agency officials to "root out" cases of oil market fraud that affect pump prices, including actions by speculators.

"We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said in prepared remarks to a townhall-style meeting in Nevada.




Read more: http://www.reuters.com/article/2011/04/21/us-usa-energy-fraud-idUSTRE73K5FS20110421

---

Yay, the excess profits have been made, yay perfect timing

[Ian David]

1. I have an idea.

How about if ordinary Americans could buy prepaid fuel cards for gas and heating oil by the gallon, rather than by the dollar value?

For example, I could go to a gas station and buy 1,000 gallons of gasoline at the current rate of $3.85 per gallon.

Then, when ever I needed gas, I use my gas card, and buy however many gallons I want, until my 1,000 gallons is used-up, regardless of whatever the current price per gallon is.

If gas prices go down, I re-charge my gas card with more gallons.

This way, people would be "speculating" on fuel that they will actually USE.

[SkyDaddy7]

5. SWEET IDEA!! Little people speculation!

I bet that would somehow step on the toes of Wall Street? I have no idea but that sounds like a good idea to me other than it would probably be Wall Street who would run such a program & if so you know they would find a way to fuck people. Like I said I do not know anything other than that sounds like a VERY GOOD IDEA TO ME!!

Maybe you should write some letters? I know! Start a Facebook page!! If you do please send me a link I will join...Then you could get everyone to contact their Congressman/woman & Senator to see what happens...Tell them we want the same options big corporations have to buy gas now for the future!

Never know?

[RUMMYisFROSTED]

6. A 1000 gallons?

Where's that $4K I have lying around?

:eyes:

[Ian David]

7. I regularly buy home heating oil about 500 gallons at a time. n/t

[RUMMYisFROSTED]

9. Most people, however, buy fuel a dozen or two gallons/cubic feet at a time.

[SnowCritter]

8. This already exists in my neck-of-the-woods

There's a company called "First Fuel Bank" that does exactly what you described.

[Ian David]

14. Ooh, cool! n/t

[skyounkin]

13. A couple companies do this already

it's used up in Maine with some companies. The first year they unrolled it the supply was sold out almost within a week or so.

[DCKit]

2. Actually, this is excellent timing.

This is the time of year they generally raise prices to prime the pump for the summer.

On the other hand, he asked AG Holder to look into this. I don't think that guy can see past the glass surface of a mirror.

[CrossChris]

4. Oil ETF's shot up today, possibly on this news. Maybe b/c they know Holder won't touch them.

He really might be near Alberto levels of ineffectiveness. Somebody tell me something positive that he's done & I'll feel better.

[goodnews]

12. I agree it was good timing only

I think it was timed to balance out his escalation in Libya with drone attacks. Obama is worse than Bush, he promotes imperialism while looking he isn't.

[elleng]

3. About time!!!

[aggiesal]

10. It's about time ...

San Diego prices
$4.15 Unleaded
$4.25 Mid-Grade
$4.35 Super
$4.45 Premium

No increase in demand.
No decrease in reserves.

If oil prices are based on Supply & Demand,
the price should be floating up and down.

It's been going only up for about 8 weeks now.

Is there fraud? You bet.

[Historic NY]

11. Make the Commodities Regulators do their job...that would be a first step.

[aggiesal]

15. Love your signature line. ...

Do you mind if I use it elsewhere?
Thanks in advance.

[Historic NY]

30. be my guest... he also said "Thank God, we have a system of labor where there can be a strike"

[William769]

16. High gasoline prices prompt Justice Department to eye energy industry

Source: CNN

Washington (CNN) -- Prodded by growing public frustration over sharply rising gasoline prices, the Justice Department on Thursday announced the formation of a team -- the "Oil and Gas Price Fraud Working Group -- tasked with the goal of ensuring consumers are not victims of price gouging.

Gas prices exceeding $4 per gallon or higher are "tough" for most Americans, President Barack Obama told an audience in Reno, Nevada. "We are going to make sure that no one is taking advantage of American consumers for their own short-term gain."

"This gas issue is serious," the president said. "It hurts."

Attorney General Eric Holder made no secret the move is a direct response to public angst, not to current evidence of any illegal conduct.


Read more: http://www.cnn.com/2011/US/04/21/holder.gas.prices/index.html?hpt=T1

---

It's about friggin time!

[tridim]

17. The problem is that speculation for the sake of profit is LEGAL.

[elleng]

19. but it can be limited, and has been, in the past,

until gramm+++ got into it, resulting on removing limits on % of holdings.

However,

'CFTC delays tough commodity speculation crack-down.'

http://www.reuters.com/article/2010/12/16/us-financial-regulation-limits-idUSNLLGNE6Q120101216

'”Commodity speculation (including coffee) in the United States changed fundamentally . . due to a rather obscure piece of legislation written by Republican Senator Phil Gramm that substantially relaxed, and in many cases eliminated completey, federal regulation of futures trading in American commodity markets. Gramm essentially managed to turn American commodities markets into a kind of financial Wild West”.

From 1936 to 2000, the year when Gramm slipped the controversial legislation through by attaching it to a 11,000 page omnibus Senate appropriation bill, speculation in the commodities (sugar, cocoa, coffee) markets was limited to experienced investment firms whose trading practices were regulated by Congress. After 2000 world commodity markets were opened to the whims of day-traders and less experienced and unregulated investors.

Couple this with last year’s purchase of the New York Board of Trade (NYBOT which housed the arabica coffee trading system in addition to cotton, sugar and other commodities) by the Intercontinental Commodities Exchange (ICE), a British electronic energy marketplace. Sam Kornell writes, “The sale of NYBOT to the ICE made it even easier for non-commercial investors to get in – in a big way – on the commodities futures action. For one thing, the ICE and other electronic markets are harder to regulate, and they make investment in commodities contracts relatively easy”.'

http://beanactivist.wordpress.com/2008/07/16/world-coffee-market-the-impact-of-speculation/

[Teaser]

18. every president promises to look for fraud in oil prices when they are high

but it's just two things:

1) a long term upward trend in the price of oil

with a

2) superimposed spike due to speculation.

Neither of these causes are "fraudulent".

[DCKit]

20. "...not to current evidence of any illegal conduct."

"None are so blind...."

Does Holder (Alberto II) have to prove we were right about him every single day? Or that Obama should have begun this Presidency by making a clean sweep of the DOJ?

[Johnny Harpo]

21. So Now They're Worried That......

consumers are not victims of price gouging.

Where the hell have 'they' been for about the last 10 years or so?

I agree...it's about time.

[global1]

22. No One Taking Advantage Of American Consumers......

like all the oil companies (BP, Shell, etc). Watch when the quarterly profits come out for the oil companies. I bet you they will be record breaking.

They were predicting $5.00/gal gas prices last fall - before any of the problems in the Mid East. The problems in the Mid East just gave them an excuse to raise the prices.

I don't want to hear the DU'ers out there cry - peak oil and diminishing supplies.

Just look around you when you are in traffic. All those cars you see are sucking up gas as fast as they can - just so you can go to the gas station and fill up again, and again, and again. Kaching, kaching, kaching........

That's what is all about. If everyone was serious about energy consumption then the auto companies would make all their cars energy efficient. I bought my last new car in 2005 and it was rated 19/23mpg city/hwy. Today I went to check on their 2011 model. The same make. You would think that 6 years later that they would be getting better gas mileage numbers. Well lo and behold - its exactly the same as it was 6 years ago. Now that's progress.

All you oil company lurkers out there on DU. Go ahead take shots at me. You only come out when somebody complains about the high prices and then you talk the company talk.

I paid $43.00 for a half tank of gas last week. That's criminal. I can afford it - but it is sure cutting into my money that I'd be spending on all the other items I have to buy that also went up in price - because of the high price of gas and others passing down that cost to me the consumer.

First they send our jobs overseas. Then the do everything in their power to make it hard for me to eke out a living. And now they are raising the price on everything.

I quite frankly don't know how some people make it from week to week. I feel so sorry for all those people that are on unemployment or have worked through all their unemployment funds and are flat broke. They can't even afford to go to look for another job.

This is the state of the union - 2011 - and its sad.

[julian09]

24. It's bad enough to fill a gas tank for $68

but worse filling a heating oil tank for close to $800 for 200 gallons to heat your home for three to four weeks in winter. This investigation farce is bull every time oil goes up, only to resolve nothing and create false impression they are doing something.
They should have price controls as the chinese do. There is no demand issue, saudies are going to reduce production because of oversupply.It is pure speculation, but our oil bought congress will do nothing to stop it.

[WHEN CRABS ROAR]

28. I'm not complaining about your position, haven't you heard,

the real problem is high taxes and government spending. Whats on TV? Who won the game?

[Earth_First]

23. Oh look at the dog and pony show!

How cute, how quaint, how embarassingly inept with energy insiders and obedient members of congress gettin' shit done...

:yawn:

[Bluenorthwest]

25. Holder is going to look for price gouging at stations

Which is what Gonzo did too!

[Andy823]

26. "SPECULATORS"!

That's the problem! As others have already stated the problem is it was made "LEGAL", and until congress fixes that, they can investigate all they want, nothing will change, and as long as republicans control the house, and oil money flows into the pockets of members of congress on "both" sides of the isle, nothing will ever change!

[Historic NY]

31. +1000

[ixion]

27. we're gonna take a look at that...

yeah. right. whatever. :eyes:

[Gin]

29. I am under the impression that speculators can buy (on paper)

oil... which takes it out of the supply ( on paper)... but they never actually have the oil...we have seen this before...the hearings exposed it and the price of oil dropped... we shall see if the same thing happens again. (IMO)

[fasttense]

32. It's a bubble and unless strict regulations are imposed, nothing is going to change.

Ravi Batra predicted this bubble when the recession 1st hit. Since we have rescued the uber rich, they have to find a place to park all their unnecessary money. (They don't need to spend it, they have everything they need or want.) Since the CDOs and other mortgage backed crap is known to be worthless, they need something solid and real. So, speculators are buying up gold, oil and other commodities. Simply put, with the help of the bailout, they are re-inflating the bubble.

This is from another post on DU (Sorry I didn't keep the DU link):

"“That’s how we have developed a massive glut of 677 million barrels worth of contracts in the front four months on the NYMEX and, come rollover day – that will be the amount of barrels ‘on order’ for the front 3 months, unless a lot barrels get dumped at market prices fast.

“Keep in mind that the entire United States uses ‘just’ 18M barrels of oil a day, so 677M barrels is a 37-day supply of oil. But, we also make 9M barrels of our own oil and import ‘just’ 9M barrels per day, and 5M barrels of that is from Canada and Mexico who, last I heard, aren’t even having revolutions.

“So, ignoring North Sea oil, Brazil and Venezuela, and lumping Africa in with OPEC, we are importing 3Mbd from unreliable sources and there is a 225-day supply under contract for delivery at the current price, or cheaper, plus we have a Strategic Petroleum Reserve that holds another 727 million barrels (full) plus 370M barrels of commercial storage in the U.S. (also full) which is another 365.6 days of marginal oil already here in storage in addition to the 225 days under contract for delivery.“

These contracts for oil outnumber their actual delivery, a sign of speculation and market manipulation, as oil companies win government authorizations for wells but then don’t open them for exploration or exploitation.

It’s all a game of manipulating oil supply to keep prices up. And no one seems to be regulating it."

There is so much oil out there, they can no longer store it in the US - we are full.

[Hotler]

33. Hey O. When are you going to eye Wall St. for fraud???

I'll answer my own question. Never.

[Trajan]

34. The horses left the barn a year ago ....

They are now summering in Miami, awaiting their jowl lifts ....

GEEZ ... Did this administration just fall off the fucking turnip truck ?

Where were you six months ago ? .... This ramp up has been going on since $2.60 ( The approx low in the good state of Oregon last cycle ) ....

......