Sen. Barack Obama on Sunday said that as president he would strengthen government oversight of energy traders, whom the Illinois Democrat blames in large part for the skyrocketing price of oil.
Do you think this will have any impact?
I am not familiar with the specific provision that is referred to. My hunch is there will be little impact.
For what it is worth, our friends at Enron were enthusiastically manipulating markets. For example, they had contacts with natural gas and electric suppliers. They arranged to take supply off the market (shutting down generators for maintenance, etc)... and then return that supply to the market when prices went up. As Far as I am aware, there is nothing comparable going on in the oil markets.
Also, it is important to remember two things regarding the futures market. For every buyer, there is a seller. And at the end of the contract closing, the closinmg price returns to the real market price. IE, if the price of a future is trading at much higher than the real piece of oil... then at closing, the people who have real oil will deliver it in new York and drive price down at closing,,, after all, if you have Texas crude and can sell it in new York for a $10 a barrel premium... then you would buy the future at that premium and deliver the oil in NY at closing to capture the excess profit.
