Obama Moves to Target Oil Price 'Fraud'

Two days after President Barack Obama pointed the finger at oil 'speculators' for soaring gasoline prices, the Justice Department said it would set up a task force to tackle fraud.

The U.S. Justice Department announced a probe into oil price fraud and speculation on April 21, hoping to limit the rise in pump prices that have gas-hungry Americans up in arms.

Two days after President Barack Obama pointed the finger at oil "speculators" for soaring gasoline prices, the Justice Department said it would set up a task force to tackle fraud.

U.S. consumers have seen oil prices rise over 8% in the last month and the average gallon costs 35% more than it did a year ago.

In a memo, Attorney General Eric Holder said there were legitimate market reasons for the rise in gasoline prices, but urged swift action where gouging and other illegal practices are found.

"We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity."

On April 19 Obama sought to echo popular unease at rising costs -- which risk weighing down the U.S. recovery and could dampen his 2012 reelection hopes. "It is true that a lot of what's driving oil prices up right now is not the lack of supply. There's enough supply. There's enough oil out there for world demand," Obama said at a campaign-style event not far from Washington.

"The problem," Obama said, "is that oil is sold on these world markets, and speculators and people make various bets, and they say, 'you know what, we think that maybe there's a 20% chance that something might happen in the Middle East that might disrupt oil supply,'" he said.

Besides investigating retail prices, the group will look into commodities markets, examining the role of speculators and index traders in the oil futures markets.

Copyright Agence France-Presse, 2011

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