White House Calls for Greater Oversight of Energy Markets

WASHINGTON, DC - APRIL 17:  (L to R) U.S. Pres...

WASHINGTON, DC - APRIL 17: (L to R) U.S. President Barack Obama arrives to speak about the oil markets followed by U.S. Secretary of the Treasury Timothy Geithner, Commodity Futures Trading Commission Chairman Gary Gensler and U.S. Attorney General Eric Holder in the Rose Garden of the White House on April 17, 2012 in Washington, DC. Obama announced a plan to increase oversight and crack down on manipulation of the oil markets. (Image credit: Getty Images via @daylife)

In a Rose Garden speech, President Obama took on critics of his energy policy and suggested his administration would take steps to ensure that “an irresponsible few aren’t able to hurt consumers by illegally manipulating or rigging the energy markets for their own gain.”

Obama said, “We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher – only to flip the oil for a quick profit. We can’t afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick.

In order to increase oversight over energy markets, the White House called on Congress to provide “immediate funding” of $52 million to support a “six-fold increase” in the CFTC’s surveillance and enforcement staff for oil futures and swaps market trading and to upgrade the CFTC’s technology for monitoring and analyzing energy market activity. 

President Obama also proposed a ten-fold increase in the civil and criminal penalties for “illegal market manipulation.” The White House also said it would request new authority for the CFTC to “direct exchanges to raise margin requirements to help limit disruptions in energy markets.” Currently, the White House said, margin requirements for oil futures are “roughly 20% lower than they were in May of 2011.”

Governor Mitt Romney, President Obama’s likely opponent in November, was quick to criticize the proposal, arguing that the plan “will not distract the American people from the president’s consistent record of sacrificing America’s energy future to appease the environmental extremists in the Democratic Party.” 

Enhanced by Zemanta