Newspaper article THE JOURNAL RECORD

Panel Finds No Evidence of Oil Specimen

Newspaper article THE JOURNAL RECORD

Panel Finds No Evidence of Oil Specimen

Article excerpt


WASHINGTON (AP) - The Commodities Futures Trading Commission said Thursday that contrary to White House assertions, there is no evidence speculators are responsible for the recent escalation and volatility of oil prices.

Commission officials told the Senate Governmental Affairs Committee that producers, refiners and end users such as airlines have accounted for 85 percent to 90 percent of the trading in crude oil futures on the New York Mercantile Exchange since Iraq's Aug. 2 invasion of Kuwait.

``If anything, it (speculation) has been at an unusually low level,'' said Commissioner William P. Albrecht. ``Speculative. . .activity in these markets has actually fallen from pre- increases in prices on the futures market.

Meanwhile, he said, oil prices have risen more in foreign markets than they have in the United States. For example, while the price of light sweet crude exactly doubled on both the cash market and the Merc, prices for North Sea Brent on the London market increased 115 percent.

Claiming there is no shortage of oil, the Bush administration has repeatedly blamed speculators in the futures markets for the spiraling prices since the embargo against Iraq and Kuwait cut off 4.3 million barrels per day - or about 8 percent - of the world's supply.

``Frankly, there just is no way to justify price increases from $24 to $39 a barrel. . .except through speculation of futures buying,'' White House Press Secretary Marlin Fitzwater said in September.

However, Albrecht, citing Energy Department figures, said the high prices reflect a daily shortfall in world production of 3.4 million barrels a day in September and 1.1 million barrels in October despite increased production by Saudi Arabia and other exporting countries. …

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