In The News
Obama denounces energy speculators
U.S. Sen. Barack Obama, D-Ill., the presumptive Democratic presidential nominee, announced a plan June 22 to crack down on excessive energy speculation and fully close the "Enron Loophole" to ease the impact of rising fuel prices.
Obama's campaign said the loophole was created by then-U.S. Sen. Phil Gramm, R-Texas — campaign co-chair of the presumptive Republican presidential nominee, U.S. Sen. John McCain, R-Ariz. — at the behest of Enron.
It exempts from regulation most over-the-counter energy trades and trading on electronic energy commodity markets, Obama's campaign said.
McCain spokesman Tucker Bonds told news agencies June 22 that the bill with the loophole was signed into law by former President Clinton, a Democrat, and that McCain likewise supports efforts to close it.
"For the past years, our energy policy in this country has been simply to let the special interests have their way — opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon," Obama said.
Because of this loophole, "the Commodity Futures Trading Commission is unable to fully oversee the oil futures market and investigate cases where excessive speculation may be driving up oil prices," Obama said.
Obama also announced that he wants to ensure that U.S. energy futures cannot be traded on unregulated offshore exchanges; work with other countries to coordinate regulation of oil futures markets; and call on the Federal Trade Commission and Department of Justice to vigorously investigate market manipulation in oil futures.
Speculation in crude oil by big investment funds, such as those that handle many truckers' 401(k) accounts, has nearly doubled since 2000 amid uncertainty in other traditionally profitable investment markets such as real estate, and at the recent oil summit in Jeddah, Saudi Arabia, Saudi officials spent much of their time denouncing "despicable" commodities traders for driving up prices, The Wall Street Journal reported.
Other factors driving up the cost of oil in the United States include war in oil-producing areas such as the Middle East and Africa, the weak dollar, the soaring global demand and stagnant or declining global production.