Feds probe speculators' role in rising oil prices

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Feds probe speculators' role in rising oil prices

By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — The nation's top regulator of oil trading announced on Tuesday the creation of a special federal task force to study the role of speculators and the investment practices of large institutions that critics believe are running up oil prices.

The announcement came as a special advisory committee went before the Commodity Futures Trading Commission to discuss ways to make the oil markets more transparent. Increasing reporting requirements and other transparency measures would reduce concerns that oil traders are manipulating the trading of contracts for future delivery of oil, called futures, in ways that drive up oil prices. The CFTC announced in late May that it was investigating whether there has been price manipulation during this year's steep run-up in global oil prices.

With the average price of gasoline nationwide now above $4 a gallon, Congress is studying a number of measures to quash what many believe is speculative behavior that is pushing up oil prices. The CFTC, which regulates the futures markets, has said it doesn't believe that speculation causes today's high oil prices but has promised that the task force will take a deep look.

"It is intended to bring together the best and brightest minds in government to aid public and regulatory understanding of the forces that are affecting the functioning of these markets and it will strive to complete its work quickly and make public its results," CFTC Chairman Walter Lukken said.

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