Udall, Dems finger speculators for high gas prices; Tipton, Republicans blame Obama administration

By David O. Williams
Real AspenJune 3, 2011
As Colorado Sen. Mark Udall and other Democrats blame speculation in the financial markets for skyrocketing gas prices, Republicans – including U.S. Rep. Scott Tipton of Colorado – continue to target Obama administration policies. This time Tipton is fingering the Federal Reserve.

“The value of a barrel of oil is based off of the U.S. dollar, correct?” Tipton said during a congressional hearing this week. “So would you see it as a failure of the federal government, specifically the Fed, failing to stand up and strengthen the U.S. dollar, allowing it to weaken, which is ultimately affecting gas prices – hurting senior citizens, hurting struggling families here at home.”

However, many observers say infusing the banking system with cash is critical to freeing up credit for small businesses and that a weaker dollar improves the climate for U.S. exports.

And besides rampant speculation in the oil markets, an ongoing spring of violent unrest in the Middle East is also being blamed for higher prices at the pump.

The price of one gallon of unleaded gas at The Aspen Store today is $4.59.

Tipton and other Colorado Republicans have been criticized for their lack of support for reining in tax breaks and subsidies for the nation’s leading oil and gas companies, which have been enjoying record profits during the recent spike in gas prices.

The Colorado GOP contingent, however, continues to hammer on Obama administration policies favoring more environmentally restrained domestic energy production.

Udall, meanwhile, joined other lawmakers this week at the U.S. Capitol to voice concerns over the role of complicated finance speculation in high gas prices.
U.S. Sen. Mark Udall in Aspen last summer.
Troy Hooper

"Last summer, the Dodd-Frank Act required the CFTC to impose strong speculation limits on oil and gas trading by January 22, 2011," a press release from Udall and his colleagues stated. "The Dodd-Frank Act also gave the CFTC the authority to stop excessive speculation by increasing margin requirements, among other provisions.

"Unfortunately, to date the CFTC has not met its statutory obligations on position limits and has not used its authority to ensure that gas prices at the pump accurately reflect the fundamentals of supply and demand.

"As a result, Goldman Sachs estimated last March that excessive speculation was driving up oil prices by about 20 percent, and the CEO of Exxon Mobil recently testified that speculators were driving up oil prices between 30-40 percent.

"There is mounting evidence that the rapid increase in gasoline prices has nothing to do with the fundamentals of supply and demand, and everything to do with Wall Street firms that are artificially driving up the price of oil in the energy futures markets."

comments: 1 Comment on "Udall, Dems finger speculators for high gas prices; Tipton, Republicans blame Obama administration"

verysoreloser – June 04, 2011, at 8:08 p.m.

Mark Udall is on the correct side of this issue. The GOP for some reason doesn't want to solve the problem. The GOP needs to quit using the issue to further oil drilling interests. The solution isn't drilling, its stopping the gaming in the oil futures markets.

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