Federal Regulator Fails to Respond to Request by a Quarter of the U.S. Senate Desire to Have Transparency in U.S. Oil Markets

WASHINGTON, DC – Today, the Commodity Futures Trading Commission (CFTC) failed to respond to U.S. Senators Maria Cantwell (D-WA) and Olympia Snowe’s (R-ME) request to require greater scrutiny of foreign trading of U.S. delivered commodities. Cantwell and Snowe are still seeking response to their letter, which was cosigned by 20 other Senators and asked for a response by June 5, 2008.
In the May 22 letter, the Senators called for the Commission to require greater scrutiny of foreign trading of U.S. delivered commodities.  Energy traders in the United States utilize foreign futures platforms that trade U.S. delivered energy goods.  Most notably, substantial trading occurs on the International Petroleum Exchange in London, which the United Kingdom’s Financial Service Authority does not regulate to the same degree of regulations as the CFTC in the United States. 
“Demand from India and China do not make oil prices rise $12 in one day,” said Cantwell. “The CFTC is absent from policing the oil markets that are wreaking havoc on American families and businesses. This matter is urgent to my constituents and the American economy and I am disappointed that the Commission chose to not respond to the call of nearly a quarter of the Senate to have more transparency in the oil markets.”
 “On a day when the price of oil rises by more than ten dollars to a new record high, there couldn’t be a more important time to ensure that the playing field is level and we have consistent oversight of our energy markets,” said Senator Snowe.  “There are already projections that by the 4th of July weekend, the price of oil will exceed $150 a barrel.  It is imperative that the CFTC exercise their authority and protect American consumers from the threat of price manipulation.”
Thursday, Commissioner Bart Chilton responded to the bipartisan letter sharing concern with the Senators over the lack of U.S. commodity market oversight, but the Commission has still not responded. Cantwell and Snowe, and 20 of their colleagues, are still seeking response to this letter and are urging the CFTC to respond.
“While I appreciate Commissioner Chilton’s response that he shares our concern over the lack of U.S. commodity market oversight, it is a disservice to Americans and our economy that only one Commissioner met the letter’s June 5th response request,” said Cantwell.  “As noted in the letter, the CFTC can expect legislative action next week that will ensure they meet their responsibility to police the commodity futures market.”
“I believe that the Commission has the obligation and responsibility to ensure that our strong domestic regulatory oversight of these markets is not compromised.  The Commission should utilize our available administrative authorities to require that such trading be subject to similar market surveillance rules and regulations that would apply to fully regulated futures trading, such as speculative position limits or accountability levels, like those that apply to the New York Mercantile Exchange (NYMEX),” said Chilton.
On Tuesday, Cantwell chaired a Senate Commerce Committee hearing investigating whether market manipulation is behind today’s skyrocketing oil and gas prices.  The hearing examined what is behind today’s record high oil and petroleum distillate prices; what connections exist between financial markets – particularly the futures market – and the pump price consumers pay; whether there are opportunities for bad actors to manipulate these crucial markets; and the government’s role in protecting consumers from possible illegal activity.  Witnesses included: Soros Fund Management Chairman George Soros, University of Maryland Law School Professor Michael Greenberger, Inland Oil Company President Gerry Ramm, Federal Energy Regulatory Commission official Lee Ann Watson, and Consumer Federation of America representative Mark Cooper.
"We don’t know what is going on in the oil markets but we expect federal oversight agencies to actively police the oil markets for fraud, manipulation, and excessive speculation.  American consumers know that the status quo is broken and I will continue working hard to make sure our federal regulators are meeting their legal responsibilities,” continued Cantwell.   
Cantwell continues to work tirelessly to increase transparency in the energy markets and make sure market manipulation is banned. Earlier this year, Cantwell called on the President to establish a new Oil and Gas Market Fraud Task Force under the leadership of the Department of Justice to examine possible fraud and manipulation in oil and gas markets. Cantwell has cosponsored legislation to help prevent price manipulation and excessive speculation in energy commodity markets that are leading to high energy prices for U.S. consumers.  
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