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Sen. Feinstein Calls Record Gas Prices an 'Illegal Short Squeeze'

The senator also asked the Federal Trade Commission to monitor energy price and production data.

California's senior senator Sunday charged that California's record gasoline prices may be the "results of an illegal short squeeze" engineered by the handful of companies that refine gas here.

In a letter to the Federal Trade Commission, Sen. Dianne Feinstein, cited news reports that said Tesoro Corporation—whose refinery near San Pedro went down for maintenance—was taken advantage of by other gas suppliers "either through collusion or the use of market power."

"Publicly-available data appears to confirm that market fundamnetals are not to blame for rising gas prices in California," the California democrat wrote in a letter to FTC chairman Jon Leibowitz.

Feinstein also called on the FTC to monitor energy price and production data gathered by other government agencies, to watch for "fraud, manipulation or other malicious trading practices."

She also urged the FTC to establish a permanent gas and oil oversight market committee, similar to the Federal Energy Regulatory Commission's oversight of the natural gas and electricity markets.

Feinstein said "California consumers are all-too-familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity.

She reminded the FTC of past frauds, like the 2000-2001 electrical crisis, which turned out to have been caused by market manipulation by Enron and other traders. That fraud cost the state an estimated $40 billion, caused rolling blackouts, and is cited by some historians as having cost Gov. Gray Davis his political career.

-City News Service

alexpinca October 09, 2012 at 02:12 PM
Representation based on money...well I guess it won't be that big a change.
alexpinca October 09, 2012 at 02:17 PM
The problem stems from corporate lemmings being too willing, too quickly to support corporate interests regardless of how many times we've been told to grab our ankles ...I am shocked how willing Americans are to hitch their destiny to the almighty dollar.
Komfort October 09, 2012 at 02:33 PM
I am not sure what you mean, Alex.
Diddy c October 10, 2012 at 02:22 PM
Kathy, it's not that we "give in" as you would have it. Very few people are taking vacations and road trips. This is not the 1970s. Fact is, during late 80s early 90s the housing boom started to plateau, and "drive till' you qualify" became the mantra of many first time home buyers. As buyers moved inland and into rural areas, prices and rates for housing would drop. Enter the housing bubble of the mid 90s and now you have a problem. Lots of people living in rural areas to avoid high costs for housing are now faced with commuting and increasing gas prices. You have to go to work to eat, and keep your home. Suddenly there was no option. The trend continued and now you see mass amounts of Californian's being taken advantage of by high gas prices. People aren't driving for "fun" Kathy. We drive because we need to. Until my car runs on diarrhea we will be screwed. Especially as so called "eco cars" cost $30k +
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