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Obama’s Gas-Price Task Force Should Also Examine Legal Speculation of Markets

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

WASHINGTON - The problem is not necessarily that gas prices are being driven by fraudulent or manipulative behavior by traders and speculators. The problem is that skyrocketing prices are driven by excessive speculation that is perfectly legal.

 Goldman Sachs recently estimated that speculation accounts for roughly $27 of the current price of crude oil. Since then, prices have gone up by $5 a barrel, so now speculation is estimated to account for more than $30 a barrel – or 70 cents a gallon, according to Public Citizen analysis.

This problem can be solved. If we’re serious about bringing relief to consumers, we need to rein in the speculators by ordering the Commodity Futures Trading Commission (CFTC) to implement firm position limits on traders and require that all trades are fully regulated by federal officials.

 The Dodd-Frank Wall Street Reform and Consumer Protection Act set firm position limits that would help curb speculation, but the CFTC has delayed their implementation.

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Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

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