A federal enforcement agency has filed charges that say speculators have been driving up the price of crude oil, which, in turn, affects the price of fuel at the gasoline pump and the fuel barge.
The Commodity Futures Trading Commission accuses Parnon Energy, Incorporated, Arcadia Petroleum Limited, and Arcadia Energy, a Swiss firm, and two men, James T. Dyer of Australia, and Nicholas J. Wildgoose of California, of manipulating the crude oil market in the New York Mercantile Exchange in 2008.
The CFTC charges these people traded futures and other contracts in such a way as to artificially drive the price up, and then back down, and took more than $50 million in unlawful profits. They say the bidding was carried out with no intent to actually get the oil, but rather was directed at artificially tightening the supply of crude oil at a hub in Cushing, Oklahoma.
This is alleged to have happened btween January and March of 2008, and again the following month. This was a time when prices were running up anyway, in part because markets were looking at projections of rising demand in China, India and other parts of the developing world. Crude oil went up to 147.27 a barrel on July 11 2008, and then fell.
The CFTC action could be just the beginning. With the public upset about high prices at the pump now, the Obama administration has set up a task force to find ways to crack down on crude oil price speculation.
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