The Democrats And Oil Speculators

It was just a matter to time before the Congressional Democrats would follow the President's lead on going after oil speculators.  Fresh with news that Federal investigators had just snared themselves a real case of  oil manipulation by an electronic trading firm, Optiver, Representative Chris Van Hollen and 42 other Democrat Congressmen wrote Attorney General Eric Holder a letter; urging him to use every means possible to "insure the proper functioning of our oil and gas markets."  Of course, that letter wasn't really necessary because, just last week, President Obama had announced, in a Rose Garden address, that he had committed the Justice Department to doing just that.  But, what the hell, Van Hollen and his buddies saw a political opportunity and they took it.

Now, to keep the politics going,  Van Hollen went on Neil Cavuto's Your World show to argue with Neil over how oil prices are being jacked up by speculation and manipulation of the markets.  Of course, Van Hollen immediately brought up the Optiver case as proof of this.  But, is Optiver any real proof of any  manipulation of the markets?  I don't think so.

First, the kind of charges that were brought against Optiver are extremely rare.  In terms of frequency, the feds charged that, in 2007, Optiver (one the world's largest oil and commodities trading companies) attempted to manipulate the market 19 times and were successful in at least 5 cases.  Wow, 19 times by a company that probably trades oil futures contracts thousands of times a year!  But here's another thing.  No guilt was ever proven and the court never found any real wrongdoing.  Optiver negotiated for and accepted a $15 million penalty; probably, to just get the feds off their backs and avoid any further attorney fees.  But, for a deceptive politician like Van Hollen (the former Chairman of the Democratic Congressional Campaign Committee), the penalty itself was enough proof that oil speculators are widely and illegally manipulating the oil and gas markets.