Speculators Drive up Oil Prices

The feckless Commodity Futures Trading Commission took a closer-than-usual look at a private Swiss energy conglomerate and found that the firm, Vitol, held oil contracts as a profit-making investment rather than to line up the actual delivery of fuel. At one point in July, Vitol held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange, according to a report published Thursday by The Washington Post. "It confirms to me that you have huge companies speculating," Senat

The feckless Commodity Futures Trading Commission took a closer-than-usual look at a private Swiss energy conglomerate and found that the firm, Vitol, held oil contracts as a profit-making investment rather than to line up the actual delivery of fuel. At one point in July, Vitol held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange, according to a report published Thursday by The Washington Post. "It confirms to me that you have huge companies speculating," Senator Bernie Sanders said. Some economists say speculators, not supply-and-demand forces, have driven up crude oil prices by 25 percent to 50 percent. Sanders said he was glad the commission finally got its act together. "If you had an administration concerned about protecting consumers rather than big speculators this is something that would have been investigated years ago," he said.

The Post said the discovery "revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators." It said other records "showed that a significant amount of trading activity was concentrated in the hands of just a few speculators."

Sanders cosponsored legislation to rein in speculators as one way to bring down oil prices.

Separately, with prices hovering near record highs as the home heating season approaches, Sanders is the chief Senate sponsor of legislation to increase assistance for the elderly, disabled and families facing steeply higher home heating bills.

To read The Washington Post article on speculators, click here.

To read Times Argus coverage of the home heating crisis in Vermont, click here.