Record Oil Speculation Drives Gas Prices - CBS News
According to the Oil Price Information Service, a record 65% of the world's oil supply is now purchased by speculators, who they estimate have added 14% to oil costs, or 50 cents to each gallon of gas.
The futures markets are regulated by the Commodities Futures Trading Commission (CFTC).
CFTC FAQ:
Q. Who heads the CFTC?
A. Goldman Sachs alumni Gary Gensler
Q: Why doesn't the CFTC curb speculative excesses in oil trading?
A: Dodd-Frank mandated that by February, 2012, the CFTC write rules for the oil markets designed to stop excessive oil market speculation. But it never happened. Gensler suspended implementing the rules, citing concerns raised by Wall Street firms, led by JPMorgan and Goldman Sachs, and their top-shelf legal teams.
Q. Haven't I heard of the CFTC before?
A. The CFTC was thought to be a major contributor to the mortgage meltdown, through negligent oversight of 'junk' mortgage-related futures instruments, leading to strengthened rules under Dodd-Frank. The CFTC was also recently in the news for its failed oversight of MF Global, where $1 billion of investor funds turned up missing. MF Global is run by former Goldman Sachs CEO John Corzine
Q. Why is the CFTC a year late implementing the other Dodd-Frank reforms?
A. The congressional Republicans slashed the CFTC budget last year. You know, we have to balance the budget, right? Gensler says he doesn't have the manpower to implement the reforms.
