<p>It isn’t Iran or emerging new economies, it’s simply traders gouging the F out of consumers. Welcome to unfettered capitalism, where the laws of free market economics no longer apply. Drilling here won’t do much to lower oil prices if the root of the problem–deregulation of derivatives trading (circa 2000 through the Commodities Futures Moderinzation Act)–is not corrected. Before you think it is supply and demand driving oil prices you need to learn about ICE, which is now completely out of US jurisdiction for regulation, how it works, and how oil futures are traded. It’s completely farcical.</p>
<p>For 3 years, the CFTC hid the fact that the 2008 oil bubble prices were due in large part to manipulation by traders, the public should be outraged. They’re now doing the same thing again, and nothing will change until the hammer comes down and we start really going after excessive speculation and start regulating again.</p>
<p>CFTC Report Reveals Rampant Speculation in Oil Markets - Newsroom: Bernie Sanders - U.S. Senator for Vermont</p>
<p>“This report clearly shows that in the summer of 2008 when gas prices spiked to more than $4 a gallon, Goldman Sachs, Morgan Stanley, and other speculators on Wall Street dominated the crude oil futures market causing tremendous damage to the entire economy,” Sanders said. "The CFTC has kept this information hidden from the American public for nearly three years. That is an outrage.</p>
<p>The American people have a right to know exactly who caused gas prices to skyrocket in 2008 and who is causing them to spike today. The CFTC claims they need more data to impose speculative position limits as required by Dodd-Frank. That is laughable. The American people need action to bring down gas and oil prices and they need it now, which is why I have introduced legislation with eight co-sponsors to do just that."
On June 15, 2011 Sen. Sanders introduced a bill titled the “End Excessive Oil Speculation Now Act of 2011”, which would force the Chairman of the CFTC to impose strict limits on the amount of oil speculators can trade in the commodity and futures markets.</p>
<p>[CFTC</a> Report Reveals Rampant Speculation in Oil Markets - Newsroom: Bernie Sanders - U.S. Senator for Vermont](<a href=“NEWS: 11 Senators Back House Progressives in Demand for Passage of Entire Biden Agenda » Senator Bernie Sanders”>NEWS: 11 Senators Back House Progressives in Demand for Passage of Entire Biden Agenda » Senator Bernie Sanders)</p>
<p>ICE opened up in 2000. Before ICE opened, the typical American family spent 7% of their disposable incomes on food and fuel, after ICE it skyrocketed to 20% and continues to climb. ICE is unregulated and outside of US jurisdiction. It only takes a quick search to see who set up ICE: Goldman Sachs, JP Morgan, BP, etc. 1999-2000 was also the year we deregulated derivatives trading via the Commodities Futures Modernization Act and the Financial Services Modernization Act.</p>
<p>A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate “round-trip” trades. Round-trip trades occur when one firm sells energy to another, and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.</p>
<p>“Traders of the the ICE core membership (GS, MS, BP, DB, RDS.A, GLE & TOT) wouldnt really have to put much money at risk by their standards in order to move or support the global market price via the BFOE market. Indeed the evolution of the Brent market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and squeezing those who had sold oil they did not have. The fewer cargoes produced, the easier the underlying market is to manipulate.” - Chris Cook, Former Director of the International Petroleum Exchange, which was bought by ICE.</p>
<p>How widespread are round-trip trades? The Congressional Research Service looked at trading patterns in the energy sector and this is what they reported:</p>
<p>This pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place. Yet since most of the trading is unregulated by the government, we have only a slim idea of the illusion being perpetrated in the energy sector.</p>
<p>DMS Energy, when investigated by Congress, admitted that 80 percent of its trades in 2001 were round-trip trades. That means 80 percent of all of their trades that year were bogus trades where no commodity changed hands, and yet the balance sheets reflect added revenue. Remember, these trades are sham deals where nothing was exchanged. Duke Energy disclosed that $1.1 billion worth of trades were round-trip since 1999. Roughly two-thirds of these were done on the InterContinental Exchange; that is, the online, nonregulated, nonaudited, nonoversight for manipulation and fraud entity run by banks in this country. That means thousands of subscribers would see false pricing. Under investigation, a lawyer for JPMorgan Chase admitted the bank engineered a series of round-trip trades with Enron.</p>
<p>[url=<a href=“The Global Oil Scam: 50 Times Bigger than Madoff | Seeking Alpha”>The Global Oil Scam: 50 Times Bigger than Madoff | Seeking Alpha]The</a> Global Oil Scam: 50 Times Bigger than Madoff - Seeking Alpha<a href=“MUST%20READ%20FOR%20EVERY%20AMERICAN!”>/url</a></p>