On April 17, President Barack Hussein Obama called on Congress to pass a series of measures that would help limit what he called speculation that’s driving up the price of oil and gasoline. Obama said “it’s not fair…speculators reap millions while millions of American families get the short end of the stick. We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage and driving prices higher only to flip the oil for a quick profit,” said Obama. He continued, “None of these will bring gas prices down overnight. But they will prevent market manipulation, and help protect consumers.”
Obama proposed increasing spending on technology to improve the oversight of energy markets, and increasing by six times the funds spent on surveillance and enforcement staff for the Commodity Futures Trading Commission. Obama has proposed a $52 billion program to monitor speculator activity more closely.
Jay Levine, broker at Enerjay in Portland, ME, says, “Any outside intervention [by the government] usually doesn’t last or alter the picture that was in place before any threat of intervention. The markets do what they were doing or going to do before. With that said, the intervention throws a monkey wrench in the short-term picture and typically only adds to market direction uncertainty.”
House Speaker John Boehner (R-OH) denounced Obama’s plan as unnecessary. “Where is his Federal Trade Commission? Where is the SEC?” said Boehner. “He’s got agencies there. So instead of just another political gimmick why doesn’t he put his administration to work to get to the bottom of it.” But getting to the bottom of it might be a problem for Obama, since the White House cannot cite even one instance of illegal oil price speculation.
But is not Obama speculating with our tax money on green or clean energy (or whatever it’s called this week) by artificially manipulating markets? Who is going to protect us taxpayers from Obama’s speculation on green energy companies? What penalty should Obama have to pay for speculating with our money? He called on Congress to pass a series of measures that would help limit speculation. Is speculation on availability of oil evil, yet speculation on green energy permissible?
Obama called for speculators to be monitored. Does that mean all speculation, or only on commodities of which he approves? Are we again seeing Obama’s hypocrisy?
And Obama’s speculation lately has not been stellar: Solyndra, Beacon Power, Ener1. Should Obama have to pay a penalty for speculations that went bankrupt, thus driving up the price of green energy?
An oil future (speculation) is a contract between a buyer and seller, in which the buyer agrees to purchase a certain amount of oil at a fixed price. Futures offer a way for a purchaser to bet on whether the oil price will increase in the future. Once locked into a contract, a futures buyer would receive a barrel of oil for the price dictated in the future contract, even if the market price was higher when the barrel was actually delivered. But nowhere does Obama speak to the fact that speculators may lose money. Obama wants to limit speculator profits, but not losses. Is that fair?
But that’s just my opinion.Powered by Sidelines