With evidence that speculation had driven a rise in fuel prices last year, President Obama announced the creation of the Oil and Gas Price Fraud Working Group, which was tasked with investigating oil speculation. The task force, led by the Justice Department, was designed to prevent manipulation of the oil market and price-gouging at the gas pump.
Nearly a year after its creation, though, the task force has met “only a handful of times” and has yet to issue any public reports, McClatchy reports:
The Oil and Gas Price Fraud Working Group has met only four or five times since its creation last April 21, and most of those meetings came at the time of its inception. Back then, Obama promised that the group would “root out any cases of fraud or manipulation” and noted that its scope would include the “role of traders and speculators.”
Oil prices have begun rising again like they did before the task force was formed. A spokesperson for the Justice Department, which is leading the task force, told McClatchy that “the working group is monitoring the situation, and if we find any evidence of criminal behavior or other misconduct we will respond immediately.” The task force is also assisting the Federal Trade Commission in an investigation of American oil refiners and “conducting other, nonpublic investigations” into the oil and gas industry.
A wide range of experts pinpointed oil speculation as the cause of both the 2008 and 2010 spikes in oil prices, with evidence strong enough that Obama felt the need to create such a task force in the first place. Oil prices are again rising rapidly despite the lowest demand since 1997, and experts are again pointing to “speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers.”
As McClatchy noted, the U.S. currently has “ample oil and gasoline inventories,” suggesting that “oil and gasoline prices are disconnected from supply-and-demand market fundamentals” and are rising due to speculation. The only question now is whether the task force created to investigate such irregularities is committed to doing anything about it.