Press Release of Senator Cantwell

WASHINGTON, D.C. – After the price of oil closed below $100 a barrel, the first time since April 1, 2008, U.S. Senator Maria Cantwell (D-WA) welcomed the short-term relief this will bring to American families and businesses, but argued that these record-high prices could have been prevented if the Commodities Futures Trading Commission (CFTC) had properly regulated dark markets.

 

“Markets have to be built on basic market fundamentals, not on greed,” said Cantwell. 

 

The CFTC is still not doing everything that can be done to police the financial and oil markets to prevent speculators from artificially driving up oil commodity prices and that it could happen again without prudent regulation.  The CFTC’s and Commodities Futures Modernization Act’s failure to properly regulated credit default swaps set the table for the today’s financial crisis.  

 

“For the first time in months, oil is under $100 a barrel,” said Senator Cantwell.  “And while this will bring short term relief for millions of Americans, the price spike this summer and continued unnecessary price volatility is exactly what happens when you don’t have police on the beat.  Rogue Wall Street traders and bankers have taken advantage of lax federal oversight in the financial and commodities markets, and are fleecing consumers and businesses.  Since Congress started acting to rein in excessive speculation, consumers saved $6.7 billion at the gas pump.  We have to continue to act and the CFTC and FTC must bring the light of day to unregulated markets.  They can no longer continue turning a blind eye to artificial volatility and must step up to permanently rein in excessive speculation to prevent oil from taking these artificial leaps in price above the $100 a barrel mark.”

 

Compared to 2007, Americans have paid $76 billion more for gas and $209 billion more for oil.  Various independent reports have shown that the fluctuations in price from 2007 to July 2008 cannot be explained solely by supply and demand forces.

 

Over the past few months, these various independent reports have shown that speculators drove oil prices to record levels this summer, and then changed their positions starting on July 15, causing prices to start declining; that the dramatic rise in oil prices in June, and subsequent fall in price in July, can’t be explained by any of the fundamentals of supply and demand; that new data tools are needed so that federal agencies can stop any market manipulation; and, that a weak dollar was also not the cause for these price hikes. 

 

Cantwell has repeatedly called on federal agencies including the Federal Trade Commission and the Commodities Futures Trading Commission to use their existing authority to conduct oversight over the oil and gas markets.  Earlier this year, Cantwell chaired a landmark Senate Commerce Committee hearing which served to highlight many of the oil futures market loopholes.  On June 23, Cantwell introduced the Prevent Unfair Manipulation of Prices (PUMP) Act which takes a comprehensive approach to address the loopholes that allow energy traders to evade federal oversight.  In April, she called on the Department of Justice to create an Oil and Gas Market Fraud Task Force to examine fraud and manipulation of oil and gas markets. 

 

Cantwell continues to place a hold on the nominations of CFTC Commissioners Lukken, O’Malia, and Chilton.

 

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