Oil Market Manipulation
Some people believe that the oil market is manipulated by huge speculative funds causing the price to be artificially high. They quickly refer to the $147 per barrel price hit last summer. See Story (click here). The proposed solution is to increase government regulation and decrease the CFTC’s requirements to “prove” manipulation. It is ironic that these proponents never see that speculation also drove the price from $147 per barrel to $33 per barrel in the same year. These oil experts never say what the ideal price per barrel should be, because their only answer is bigger government.
Every politician tells us we need independence from OPEC. At the same time, US Government oil policy regulation decreases the ability to find and extract oil. Rep. Mike Coffman, (R-Colo.), complained the administration already is making it too difficult to drill for oil and asked about the canceled Utah leases. See story (click here).
Perhaps government regulation keeps the price of oil artificially high and speculators take advantage of the situation. The CME is setting forth limits on amounts of contracts speculators can trade as you read this article. See CME Market Regulatory Advisory (click here).
We need government to back off more regulation and let the market place correct the "problem." Once a trend begins, it gains momentum in that direction, and eventually, Wall Street puppets (our congressmen) will find a way to eliminate speculation in all commodities “for the good of the country.” Then the Black Market can open up and the consumer will get a real taste of high prices crippling the economy.
