Comment Text:
To Whom It May Concern,
On September 16, 2011, Senator Bernie Sanders from Vermont published an article on the Daily Kos blog in which he stated the ExxonMobil Chairman, Rex Tillerson, who testified before a Senate panel earlier in the year, said excessive speculation may have increased oil prices by as much as 40 percent. Senator Sanders also stated that Delta Air Lines general counsel, Richard Hirst, wrote to federal regulators in December that “the speculative bubble in oil prices has concrete detrimental consequences for the real economy.” Additionally, Senator Sanders stated an American Trucking Association vice president, Richard Moskowitz, said, “Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America's trucking industry.”
In his article, Senator Sanders when on to state that Congress recognized last year that excessive oil speculation must end and that the Dodd-Frank financial reform legislation required the Commodity Futures Trading Commission (CFTC) to eliminate, prevent or diminish excessive oil speculation by January 17, 2011. Senator Sanders further stated that months after that deadline, the commission still has failed to enforce the law, and speculators still were making out like bandits.
I subsequently read an article from Fair Fuel UK in which the author, Quentin Willson, discusses how oil from the Strategic Petroleum Reserve (SPR) was purchased by banks like JPMorgan and horded in offshore tankers, waiting for prices to rise:
http://www.fairfueluk.com/quentins_blog.php?entry_id=1316336000&title=news-release-from-robert-halfon-mp---petrol-prices-through-the-roof-as-banks-hoard-strategic-oil-stocks
Additionally, an article from Zero Hedge at the link below discusses how 80% of the bid price for SPR oil was based on a vessel-based distribution, meaning it would be weeks if not months before the SPR disposed crude finally made it into circulation, if at all:
http://advisoranalyst.com/glablog/tag/strategic-petroleum-reserve
My questions are:
1) Is Senator Sanders’ statement that the CFTC has failed to eliminate, prevent or diminish excessive oil speculation after the January 17, 2011, deadline in accordance with the Dodd-Frank Act accurate, and;
2) Are banks which do not produce, refine or market petroleum products permitted to make profits by manipulating the cost of oil released from the SPR?
I’ve corresponded with my Senator, Robert Casey from Pennsylvania, on this issue and he informed me that many of the regulations required by the Dodd-Frank Act have not yet been finalized. If that is the case, there appears to be some discrepancy with Senator Sanders’ claim about unregulated speculation continuing.
As far as the issue regarding the banks speculating on oil released from the SPR, I can only wonder why these banks that were bailed out by the tax payers are allowed to continue to make profits from American workers through artificially high gasoline and home heating oil costs.
Thank you in advance for taking the time to review my questions.
Sincerely,
Michael O’Boyle
1498 Penllyn Blue Bell Pike
Blue Bell, PA 19422-2112
