Cantwell blames speculators for sharp hike in gas prices

By:  Mike Lindblom, Seattle Times
Source: Seattle Times

Americans can blame speculators for adding to the high cost of gasoline and heating oil, argues U.S. Sen. Maria Cantwell.

"There is strong evidence the recent surge in gas prices has little to do with the fundamental supply and demand for oil," says a letter signed by Cantwell, along with Sen. Patty Murray and 11 other senators — 10 other Democrats and one independent — requesting a crackdown by the Commodity Futures Trading Commission (CFTC).

The senators say traders are exploiting political unrest in the Middle East and North Africa to drive up prices.

About 64 cents a gallon can be attributed to overspeculation, according to an analysis by Cantwell's staff and a CFTC commissioner, Bart Chilton.

Pump prices in Seattle currently average $3.93, according to gasbuddy.com.

Cantwell and Murray plan a media event Monday in Fremont to highlight small businesses hurt by the oil spike — Warren Aakervik, president of Ballard Oil, which supplies fuel to fishing boats; Carolyn Boyle, proprietor of New Roots Organics, which delivers produce; and co-founders Tom Vial and Doug McClure of Zeek's Pizza.

Chilton supports limits on how much of the market a trader may control.

Some speculation is healthy because it makes future prices more predictable, said Chilton. But speculation has reached a "blistering pace," he said, driving prices up nearly two-thirds since mid-2008.

Congress has authorized the commission to set limits, but debate rages about whether to follow through.

Some large financial firms and agribusinesses oppose the limits, according to comments compiled by Reuters. A futures-industry group said they address a "nonexistent problem," while grain giant Cargill said markets would be less efficient.

Other businesses, such as Delta Air Lines and a cotton cooperative, back stricter controls.

Three years ago, Seattle-area gas prices climbed to around $4.35, then slipped below $2 before making a gradual climb.