As I and others have been arguing: oil demand and supply has basically remained the same and yet gas prices at the pump continue to soar and we just keep getting excuse after excuse as to why. On Cenk’s MSNBC show, Tyson Slocum of Public Citizen had some interesting thoughts as to how we got the where we are in terms of Wall Street speculation:
While legislation to reign in Wall Street speculators should continue to be pursued, in addition to that we need something more immediate. We need to get the U.S. Attorney General involved and launch a Grand Jury investigation, just like Senator Blumenthal has called for. I started a petition over at Change.org joining in the Senator’s call to the AG … please be sure to support; you can sign here.
Update: well, surprise surprise, turns out supplies have even been exceeding projected inventories, which factored in oil prices falling in the stock market on May 11, as reported by MSN Money.
The Energy Information Administration said crude oil inventories rose by 3.8 million in the week ended April 6, exceeding the build of 1.6 million barrels that analysts had been expecting, according to a Platts poll. Late Tuesday, the American Petroleum Institute said oil stockpiles gained 2.95 million barrels.
If you doubt for a moment that a Grand Jury investigation would not impact gas prices in the market, consider just how much attention Galleon billionaire Raj Rajaratnam’s conviction got in that same MSN report as it related to the movement of the stock exchange:
Raj Rajaratnam, founder of the Galleon Group hedge fund, was found guilty of all 14 counts of conspiracy and securities fraud by a lower Manhattan federal court. Rajaratnam could face up to 20 years in prison, according to media reports.
The verdict was an historic victory for the Justice Department, which used tactics once reserved for investigations of mobsters, drug dealers and the like to expose financial professionals and corporate insiders trafficking in such business confidences as details about pending mergers.
Rajaratnam, 53, head of Galleon Management, was accused of using fraud to reap profits or avoid losses of more than $60 million.
The case ushered in a new era in white collar criminal prosecutions, said Anthony Michael Sabino, a professor at St. John’s University.
“For more than 30 years, the government has had a spotty history in insider trading cases, reflecting the difficulty of gathering evidence, explaining the machinations of high finance to a jury, and reconciling sometimes conflicting legal theories,” Sabino said in a statement.
Update # 2: Rep. Barney Frank was on Rachel Maddow talking about this issue:
Since then it looks like there’s been more traction on holding Wall Street speculators accountable. The Huffington Post reports:
WASHINGTON — A cadre of top Democrats said Wednesday that heavy Wall Street speculation was driving up gas prices and blasted Republicans for pushing a new bill to delay any crackdown on such speculation until the end of 2012.
“What we have now on Wall Street is a crude oil casino, and it has been opened and is now being protected by the Republicans,” said Rep. Ed Markey (D-Mass.) at a press conference that included Reps. Barney Frank (D-Mass.), Maxine Waters (D-Calif.), Joe Courtney (D-Conn.), Peter Welch (D-Vt.), Collin Peterson (D-N.D.) and Carolyn Maloney (D-N.Y.).
According to the Commodity Futures Trading Commission, the regulator which oversees speculation in the oil and food markets, the number of of speculative bets on oil is currently at an all-time high, above even the extreme levels associated with the 2008 run-up in oil prices, when oil hit its highest price ever.
All of that speculation has driven up the price of oil, according to many economists and an analyst at Goldman Sachs. Sean Cota of the Petroleum Marketers Association said at today’s press conference that a “bubble is underway” in the oil markets and that excessive speculation costs consumers and retailers $400 billion a year.
Read the rest of the HuffPost report here.