No members of Louisiana's delegation signed letter requesting swift action by Commodity Futures Trading Commission
WASHINGTON -- With gas prices soaring, members of Congress are responding with a committee hearing and a letter requesting that the Commodity Futures Trading Commission take swift action against speculative trading. "We have a responsibility to ensure that the price of oil is no longer allowed to be driven up by the same Wall Street speculators who caused the devastating recession that working families are now experienced," said the letter signed by 70 senators and House members, all Democrats and independents.
Congress is writing letters, holding hearings on relationship between speculation and high gas prices.The letter, organized by Sen. Bernie Sanders, I-Vt., quoted a Forbes report based on a document it obtained from Wall Street giant Goldman Sachs suggesting excessive speculation was responsible for adding 56 cents to the price of each gallon of gas.
No Louisiana member signed the letter.
On Wednesday, the House Energy and Commerce committee is summoning some key oil and gas industry officials and business leaders to discuss the reasons and impact of higher gas prices.
Since last fall, future contracts for West Texas Intermediate, the benchmark price for crude oil, has risen from $77.51 barrel to a high of $110.55 in recent days, despite reduced demand and high inventories.
The committee hearing will seek answers on the impact of higher prices on consumers and businesses, forecasts of future trends in prices, and possible federal responses. Republicans in Congress and the four major GOP presidential candidates are pushing for major increases in domestic drilling.
President Barack Obama, backed by many Congressional Democrats, contends there is no quick fix and that the best approach is "all of the above" that combines higher production, alternative fuels and conservation.
Commissioner Bart Chilton of the Commodity Futures Trading Commission said there is no longer any doubt speculation is responsible for some of the recent price increases, though so far the commission has failed to reign in excessive speculation, according to the 70 congressional members who signed Monday's letter.
"If you drive a Honda Civic with a gas tank capacity of 13.2 gallons, the 'speculative premium' costs you $7.39 every time you fill up," Chilton said. "If you drive a Ford Explorer with an 18.6 gas tank capacity, the total is $10.41. And, for the Ford F150, the most popular pick-up in America, with a gas tank capacity of 26 gallons, it's $14.56 more per fill up."
Goldman Sachs, one of the trading companies criticized on Capitol Hill and by Chilton, denied that speculators are driving up the price of crude.
"Commissioner Chilton characterizes this as speculation, with the suggestion it is unrelated to supply and demand conditions in the oil market," Goldman Sachs said. "We disagree. In our view, this is the mechanism by which the oil market becomes better informed and reaches a consensus on issues such as the likely impact of the improving world economic outlook on oil demand and the increasing tensions with Iran on crude oil supplies."