On June 10th, the Commodity Futures Trading Commission (CFTC) called a public meeting of its Energy Markets Advisory Committee to address continually exponentiating oil prices.
Representatives from major investment banks such as Goldman Sachs, JPMorgan, and Morgan Stanley fielded questions regarding their banks’ roles in the oil futures market for the first time under the public eye. Many groups have raised suspicion as to whether the banks are using investors’ funds to bid up oil prices, while at the same time issuing predictions that prices will rise.
Donald Casturo, managing director of Goldman Sachs, stated: “There is a clear separation between our research and trading departments…The firm is acting within the terms of the law.”
Still, organizations like Industrial Energy Consumers of America remain skeptical of the truth in this statement. The CFTC announced the launch of an investigation to be conducted by a special panel consisting of Federal Reserve, SEC, and Energy Department officials. The group will be scrutinizing commodities trading and price increases.
It is the intent of the CFTC to clamp down on the energy markets trading practices, making it a requirement for traders in the energy markets to provide reports of trading linked to commodity indexes on a monthly basis. Hopefully, before long, a consumer’s trip to the gas pump will be accompanied by a sense of calm, as opposed to the sinking feeling that he or she is being taken for a ride.
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