Stung by gas prices, Obama seeks new oil market crackdown

  U.S. President Barack Obama, whose political fortunes are threatened by rising gasoline prices, proposed new measures on Tuesday to reduce oil market manipulation that are unlikely to get support from a divided Congress.
Obama called on lawmakers to raise civil and criminal penalties on individuals and companies involved in manipulative practices.
He also pressed for more money to fund the agency charged with policing the markets to hire "more cops" for oversight and upgrade old technology.
"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," Obama said in the White House Rose Garden.
"We should strengthen protections for American consumers, not gut them," he said.
Republicans, who blame Obama's energy policies for high gasoline prices, called the effort a political gimmick, and said the new measures would not help Americans struggling with high gasoline prices.
"It probably polls pretty well, but I guarantee it won't do a thing to lower prices at the pump," said Senate Republican leader Mitch McConnell.
"The president has all the tools available to him if he believes the oil market is being manipulated," said John Boehner, the Republican speaker of the House of Representatives.
SOME DEMOCRATS WANT MORE
Obama has spent weeks trying to show he is on the case to bring down energy costs over the short- and long-term.
Gasoline prices have surged nearly 50 cents since late January, as tensions in the Middle East and supply disruptions bolstered oil costs. While prices at the pump have eased slightly in the past two weeks, gasoline remains around $3.92 a gallon nationwide.
Republicans have argued the administration needs to allow more drilling to help lower prices. But the only way to reduce the harm caused by gasoline price increases is to use less of it, said Andrew Holland, an energy policy analyst at the American Security Project, a Washington think-tank.
"The truth is, neither party is offering policies that will effectively address high gas prices," Holland said.
Senior administration officials, speaking to reporters on a conference call, said increased volatility in oil markets justified the need for the crackdown.
While congressional Democrats praised Obama's move, many have pushed him to go farther.
"I would do some additional things, but basically I'm very pleased that he's responding," said U.S. Senator Carl Levin, a Michigan Democrat whose investigations subcommittee in the past has linked speculation to higher commodity prices.
Levin and other senators want the administration to push the Commodity Futures Trading Commission, or CFTC, to enforce limits on speculation that were part of the Dodd-Frank banking reforms.
The financial industry has challenged those limits in court.
Senator Maria Cantwell is working on legislation that would ban commodity index funds from the oil market, a move backed by consumer advocates.
Peter Welch, a Democratic congressman from Vermont, said Obama should also release oil from U.S. emergency reserves to further dampen speculative buying.
"When it's been deployed in the past, it has spooked the speculators," Welch told Reuters.
HIGHER PENALTIES
Obama also asked Congress to give the CFTC the power to increase traders' margins in an effort to reduce risky trading. Currently, futures exchanges are in charge of setting margins, based on volatility.
Obama's proposal drew a quick response from the CME Group, the world's largest operator of futures exchanges.
"Taking away from exchanges the ability to manage margins would make the markets less efficient, less tied to fundamentals and would create the potential to push the hedgers out of the market, which would make oil more expensive for all consumers," the company said in a statement.
The CME also warned against confusing speculation with manipulation, and said speculations play an important role in helping oil producers and consumers offset their price risks.
The CFTC filed a record number of enforcement cases last year, but has yet to win a manipulation case involving oil.
Its lone victory is a 1998 case that accused a trader of gaming electricity futures, which took more than a decade to settle.
The CFTC is engaged in a high-profile case against oil merchant Arcadia Energy for allegedly manipulating physical oil supplies to profit on futures trades.
Obama said he wants Congress to hike civil penalties for firms involved in market manipulation to $10 million from $1 million, and also increase maximum criminal penalties.

Credit : Reuters

Rides : Best ways to save gas

We all know and feel how gas prices affects our pockets. The Organization of the Petroleum Exporting Countries, OPEC, is a primary actor in determining the price of crude oil as its members produce about 58 percent of the world’s supply, according to their website.

And the bad news is that yesterday (June 8), oil prices climbed again above $100 per barrel Wednesday after OPEC unexpectedly announced that it will keep production levels where they are.
So what we can do – how can we save some gas. Yes there are plenty of ways to save money on gas. Here are the best solutions.
Use a GPS or map your route
Use a GPS navigator or an online mapping service, such as Bing, Google, or Yahoo, to find the most effi¬cient route. You can save allot of miles if use the best way! Also – sometimes highways are more efficient to use even if you have to travel a couple of miles more. The idea is that the engine remains at a constant speed and will burn less fuel.
Get your car road-ready
According to the Environmental Protection Agency, fixing a car that is out of tune or has failed an emissions test can improve gas mileage by 4 percent. Replacing a faulty oxygen sensor can boost fuel economy by as much as 40 percent.
Tires can help save gas
Don’t overlook your tires when it comes to saving fuel. Under-inflated tires, for instance, require more energy to roll along, which eats up more gasoline. They also cause a tire to wear more quickly. Use a tire gauge at least once a month to keep them inflated at the vehicle manufacturer’s recommended pressure.
Compare gas prices
Yes gas prices can fluctuate allot from one state to another. GasBuddy.com can be your best friend here.
Driving style can save allot
Rapid acceleration and quick stops can reduce fuel economy. Avoid rapid acceleration and hard braking. Drive at the posted speed limit. Increasing your highway cruising speed from 100 kph (62 mph) to 120 kph (75 mph) can increase fuel consumption by about 20 percent.
Don’t be a drag. Don’t add to your car’s aerodynamic drag by carrying things on top of the roof if you don’t have to. When we installed a large car-top carrier on our Camry, gas mileage dropped by a notable 6 mpg when we drove at 65 mph.
Skip the gas-saving gadgets
After testing several devices that were claimed to improve fuel efficiency, consumer reports find one that provides a significant dif¬ference in gas mileage or acceleration.Moreover,the EPA’s website lists scores of such devices that the agency tested, with similar results.
And finally - The most effective way to cut your gasoline use is to buy a more fuel-efficient car.

Gasoline Is Too Damn High!!!

More Drilling = More Gasoline = Lower Gasoline Prices

Gasoline is skyrocketing past $4 a gallon and Jimmy McMillan is outraged. How are Americans supposed to afford their rent if they can’t afford the gasoline to get to work? Watch Jimmy send a powerful message to the White House: GASOLINE IS TOO DAMN HIGH!

Economics : The average U.S. price of a gallon of gasoline has jumped about 12 cents over the last two weeks, and in Hawaii the average price for a gallon is $4.5!

Drivers are fed up and don’t know what to do. The national average was $3.88, as of Friday.

A frustrated Rama Dahdouh said she is not going anywhere.

“I’m staying home. You can’t go anywhere now. Just basic where ever you go.”

AAA reported the average price of a gallon of regular gas in Chicago was $4.245 Monday, up 3.5 cents from a week ago.

Procter & Gamble Co. said Monday it raised U.S. list prices for those paper products because of rising costs for oil, gas and pulp.

The Cincinnati-based consumer products maker informed retailers of increases last week. Retailers will decide how much of those price increases to pass along to shoppers.

The Obama administration, reacting to higher prices (rather than being proactive about decreasing America’s energy independence), is calling for a probe of gasoline prices.

Sen. Richard Blumenthal, D-Connecticut, renewed his call for a federal investigation to determine if illegal speculation and trading are driving the skyrocketing increase in gasoline prices.

Blumenthal told moderator Bob Schieffer on the CBS television program “Face the Nation” Sunday, “There really needs to be an investigation involving… subpoenas and compulsory process. There needs to be very possibly a grand jury to uncover the potential wrongdoing.

“The Justice Department should take the lead, seize this moment, and send a message — a very strong deterrent message — that this country will not tolerate the kind of illegal speculation and trading and hedge fund activity that may be driving prices up.”

Current levels of global demand for oil would buffer the impacts of Japan’s nuclear crisis on Kuwait, according to Abdelatif Al-Houti, Kuwait Petroleum Corp. (KPC) managing director for world marketing.

Al-Houti told state media that the protests and unrest in Libya, as well as in Bahrain, have led to high oil prices, but that the crisis in Japan has created some price balance due to its reduced consumption of oil.

However, the prices of oil and gas products, especially auto fuel, will skyrocket due to the stoppage of several world oil refineries for maintenance, said Al-Houti, who added that Kuwait sells only to end users and not to speculators.

So … the $5 per gallon is very close!

Economics : High gasoline prices prompt Justice Department to eye energy industry

Washington (CNN) -- Prodded by growing public frustration over sharply rising gasoline prices, the Justice Department on Thursday announced the formation of a team -- the "Oil and Gas Price Fraud Working Group -- tasked with the goal of ensuring consumers are not victims of price gouging.
Gas prices exceeding $4 per gallon or higher are "tough" for most Americans, President Barack Obama told an audience in Reno, Nevada. "We are going to make sure that no one is taking advantage of American consumers for their own short-term gain."
"This gas issue is serious," the president said. "It hurts."


Attorney General Eric Holder made no secret the move is a direct response to public angst, not to current evidence of any illegal conduct.
"Rapidly rising gasoline prices are pinching the pockets of consumers across the country," Holder said in a written statement released at the Justice Department.

"We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity," he said.
The working group will report to the existing Financial Fraud Task Force, which in turn reports to the attorney general.

The new working group will be composed of representatives of the Justice Department, the National Association of (State) Attorneys General, the Treasury Department, the Energy Department, and several financial regulatory agencies.

Holder said he is asking the group to explore "whether there is any evidence of manipulation of oil and gas prices, collusion, fraud, or misrepresentations at the retail or wholesale levels that would violate state or federal laws."

While promising official vigilance, the attorney general acknowledged regional differences in gasoline prices, and said, "It is also clear that there are lawful reasons for increases in gas prices, given supply and demand."

Economics : With the recent conflicts in the Middle East and North Africa, gas prices have hit an ominous milestone.

Since the turmoil in Libya broke out in mid-February, the price of crude oil has jumped roughly 20% to more than 104 dollars a barrel, pushing up prices at the pump as well.
In some areas, gas prices are as high as four dollars! Problem is that according to the International Energy Agency, Libya has halted between 850,000 and 1.0 million barrels per day (bpd) of the country’s total of 1.6 million bpd. But if turmoil and instability will continue, Libya may halt the entire production.
The jump was the biggest since a 38-cent hike between August and September 2005. At the time, the price increase was driven by damage caused by Hurricane Katrina. Analysts say prices of $4 a gallon could have some serious implications including the further slowdown of economic recovery. A gas record price of $4.11 a gallon was achieved on July 17, 2008.
Unfortunately, with the increased tensions in the Middle East, China’s growing oil consumption and the impending arrival of the summer driving season, gas prices are not likely to abate any time soon.
According to Reuters, the U.S. government reiterated that it could tap its strategic oil reserves to safeguard economic growth.

Tapping into the oil reserve “has been done on very rare occasions,” Daley said on NBC’s “Meet the Press.”

“There are a bunch of factors that have to be looked at, and it’s not just the price,” he said.
“We’re looking at the options,” including drawing on the Strategic Petroleum Reserve, Chief of Staff William Daley said. “It is something that only is done — and has been done — in very rare occasions. There’s a bunch of factors that have to be looked at.”

The 727-million-barrel U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned oil in the world. It was established after the 1973-74 shortage created by the Organization of Petroleum Exporting Countries cut off oil over U.S. support for Israel in the Yom-Kippur War.
Oil analysts expect prices to peak at $3.75 by the end of the year.