DELAURO, DEMOCRATS HOLD HEARING ON RAMPANT OIL SPECULATION

Washington, DC — Congresswoman Rosa DeLauro (D-CT), co-chair of the House Democratic Steering and Policy Committee, today presided over a special hearing on the question of curbing rampant oil speculation. The witnesses at today's hearing were Eugene Guilford, Executive Director of the Connecticut Independent Petroleum Association, and Michael Greenberger, Professor at the Center of Health and Homeland Security at the University of Maryland Law School.

"High oil prices affect every aspect of Americans' lives – not just the cost of traveling, but of heating homes, food and other purchases," said Congresswoman DeLauro. " The cost of gas is irrefutably affected by rampant speculation in the oil market. Dodd-Frank gave the CFTC broad new authorities to investigate manipulation in the market. We need to ensure the CFTC has the resources it needs to do its job. And we should be strengthening its ability to combat rampant speculation, not working to undermine it as the House Republican Majority has done in its recent budgets. We are here to represent American consumers, not oil speculators."

Last year, at the peak of the last oil price bubble, Goldman Sachs estimated that speculators increased crude prices by around 20 percent, and the price of gas by 56 cents a gallon. According to data published by the Commodity Futures Trading Commission, the CFTC, last month, Money managers' long positions, which drive up prices, outnumbered their short positions by a record 11.8 to 1. The long/short ratio now exceeds its previous peak, just before the oil market's sudden flash crash on May 5th, 2011.It has been estimated that speculators now make up as much as 70 to 80 percent of the oil market.

The Agriculture Appropriations bill passed last year by the House Republican Majority provided only $172 million in funding for the CFTC – 44% below the president's request. The final 2012 budget funded the CFTC at only $205 million, still well below the requested amount.

In December 2011, Congresswoman DeLauro, along with Congressman Peter Welch (D-VT) and Congressman Leonard Boswell (D-IA), introduced legislation to provide the CFTC with a reliable source of funding—the Wall Street Accountability through Sustainable Funding Act. It would bring the CFTC in line with all other Federal financial regulators and authorize the collection of user fees to offset the cost of their operations. Other federal regulatory agencies funded through user fees include: Securities and Exchange Commission, Federal Energy Regulatory Commission, US Patent and Trademark Office, Federal Communications Commission, Nuclear Regulatory Commission, National Credit Union Association, Federal Housing Finance Agency and Federal Deposit Insurance Corporation.

To reduce prices in the short term, Congresswoman DeLauro recently called on President Obama to release oil from the Strategic Petroleum Reserve. The Reserve currently holds approximately 696 million barrels and is filled to more than 95 percent of its capacity. Last year, when President Obama directed the release of 30 million barrels of oil from the SPR - less than 5 percent of the reserve – in conjunction with the release of an additional 30 million barrels from our international partners, prices declined by 8 percent. And on March 15th, the Wall Street Journal reported that U.S. crude oil futures dropped by as much as $1.58 per barrel in reaction to a Reuters report suggesting that President Obama and British Prime Minister David Cameron had reached agreement on a plan torelease oil from both countries' national oil reserves.