As gas prices creep toward the $2 a gallon mark, Democratic U.S. Senator Elizabeth Warren is calling on Washington to take action against oil speculators who many experts blame for the plummeting price of gas.
“We should be doing more to protect consumers from highly volatile gas prices,” said Warren, who is currently has no plans to run for President, but might. “Average gas prices in Massachusetts are nearly $2.15 a gallon, down 10 cents from last week, and the falling costs are forcing already hard-pressed alternative energy providers to try to stretch their incomes even more.”
An oil future is a contract between a buyer and seller under which an agreement is crafted to purchase oil at a fixed price of what it is speculated to cost down the road. Uncertainty among central banks, as the U.S. looks to raise rates next year, and China attempts to lower rates is one factor causing excessive speculation, in the oil market, according to some experts.
Warren pointed out that under the Dodd-Frank Wall Street Reform legislation and the Consumer Protection Act of 2010, the Commodities Futures Trading Commission has the ability to investigate and take action if inappropriate behavior is found to be driving prices lower.
She said that although it is a “step in the right direction,” the regulations haven’t been fully implemented.
“It is time to take stronger action to address excessive oil speculation,” Warren said in a statement. “Speculators are driving down the price of oil, allowing consumers to pad their pockets while alternative energy providers suffer. We need to implement tougher rules to limit excessive speculation.”
Advocates of the law, like Warren, say enforcing Dodd-Frank will prevent excessive speculation from squeezing alternative energy providers while consumers gain from decade low oil prices.
“Wall Street’s army of lobbyists is dead set against efforts to help rein in oil speculation,” Warren said in a press release. “It is time to fight back. Regulators should stand tough, and Congress should consider further action to strengthen the CFTC’s ability to limit excessive speculation.”