Lucas,When Wall Street and Big Oil get together, you know it's not going to be good.
Goldman Sachs proudly admits to tacking on 50 cents to each gallon of gas we purchase as a result of market speculation that, while strictly legal, is essentially gambling. We pay more. They get richer. And it all has almost nothing to do with actual supply and demand.
That's not good, but it gets worse.
You would think that the ability of Wall Street to legally game the system and Big Oil's already huge profits would leave little incentive for fraud and illegal manipulation in the oil market.
You would think that.
Tell the Department of Justice: Root out corruption in the oil markets.
Last year, federal regulators charged five oil speculators with manipulating the price of oil in the early months of 2008 and making a $50 million profit from the scheme.
Here's how they did it:
The group bought up a bunch of actual oil contracts, which created the perception of an oil shortage that in turn drove up oil prices. Then, having artificially inflated oil prices, they paradoxically bet that oil prices would fall, which of course is exactly what happened when they turned around and sold the original contracts, in effect ending the bogus shortage they created in the first place.
This one example of illegal activity took place at a time when oil prices were climbing toward a record average high of $4.80 per gallon.
Today, with gas prices hovering at $4 per gallon, what role is fraud and manipulation playing in increasingly high gas prices?
To find out, President Obama has directed the agencies responsible for overseeing oil markets to root out anti-competitive and collusive behavior by the Big Banks that could be contributing to higher prices for families.
Tell the Department of Justice to investigate fraud and manipulation in the oil markets.
It's time to drag shadowy Wall Street and Big Oil activities into the light of day.
Thanks for all you do,
Allison Fisher
Outreach Director, Public Citizen's Climate and Energy Program
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