With gasoline prices soaring, House Democrats briefly returned to the Capitol Wednesday from their two-week spring break to examine accusations that Wall Street speculators are artificially driving up the price at the pump.
“The current spike in oil prices is not about [President] Obama, but OPEC and oil speculators,” said Rep. Edward J. Markey, Massachusetts Democrat.
Michael Greenberger, a University of Maryland Law School professor, who testified before the House Democratic Steering and Policy Committee hearing, said oil speculation — not supply and demand issues — is at the forefront of what is keeping gas prices above $4 per gallon in many parts of the country.
“It is obsessive speculation, which is a fancy word for saying that gamblers wearing Wall Street suits are taken these markets over and are controlling the price and creating investment vehicles that are designed to push the price of oil up,” he said.
“We have a Las Vegas exponentially on steroids making bets on the upward direction of the price of oil.”
Mr. Greenberger compared rampant oil speculation with subprime mortgage speculation on Wall Street that led to the housing crash in 2008.
Mr. Greenberger added that regulation must be strengthened to stop oil speculations from using “exotic” Wall Street investment vehicles such commodity index swaps to drive up the price of oil.
The hearing – which included a panel of 10 Democrats and no Republicans — came on the heels of President Obama’s announcement last month that he asked Attorney General Eric Holder to “reconstitute” a task force he commissioned a year go to look into oil speculation.
House Minority Leader Nancy Pelosi, California Democrat, said it is possible the nation’s Strategic Petroleum Reserve could be tapped in order to send a “message” to speculators.
“There’s always a chance [the reserve could be opened] and it’s always a message to the speculator that they don’t know what the supply might be,” she said.