YOU would have missed it if you blinked, but Washington has finally awakened from its snooze and is taking on Wall Street speculators for causing energy prices to spike.
But before you belt out a hip-hip-hooray, there’s a catch.
Rather than aim its attacks on living, breathing and donation-giving companies, the Senate Permanent Subcommittee on Investigations decided to pick on Amaranth Advisors, which gambled its last dollar two years ago.
Yesterday the subcommittee quietly finished looking into how the now-deceased Amaranth “altered natural gas prices, caused wild price swings and socked consumers with higher prices.”
That’s the conclusion of a report released by the subcommittee at the end of June, when the only natural gas the media was interested in was the byproduct of the hot dog-eating contest in Coney Island.
Any reader of this column knows that I’ve been on a crusade to get regulators to look into how speculators have been manipulating the energy markets.
The Amaranth investigation is a start, but pummeling dead companies while we are being fleeced by living ones is no way to solve a problem.
Here’s an example of what is wrong with the system.
Last Thursday the Energy Department announced that crude oil inventories rose an unexpectedly strong 3.15 million barrels for the latest week. The market had been expecting a decline of 200,000 barrels.
Right now the country and the world is awash in oil. That should be good news, right? Not when speculators’ sole purpose is to profit from rising energy prices.
So, instead of focusing on the huge amount of oil available in the country today or even (as I’ve been pointing out) that more and more of the stuff is being found in places like Africa, speculators last Thursday pushed oil to its highest price in 10 months.
Why? Because there’s some unrest in Nigeria that speculators were able to use to drum up fears that oil supplies might decline later in the year.
Might decline. Later in the year.
The hazy future rather than clear present becomes the focus whenever the market forces of supply and demand aren’t going the way speculators want. This has happened time and again.
When the supply of oil becomes abundant Wall Street latches onto the alleged shortage of refineries as its fallback reason as to why prices need to be high.
It doesn’t matter that there is also more gasoline available than we need and not even a hint of shortages.
And when all is said and done we’ll probably find that the high prices caused by speculators had a hand in everything from rising crime rates to people no longer being able to afford their homes.
So what should Washington do?
Investigations are good, especially if they are real-time events that attempt to reduce the speculation that makes Wall Street so much money and the price gouging that keeps the oil industry fat and happy.
Last year the same committee investigating natural gas decided that $20 of the price of every barrel of oil was due to speculation.
I’d venture to say that oil would be closer to $35 a barrel, not $70, if we put the brakes on speculators.
The best way to start would be to control the amount of futures contracts speculators can hold and by reducing the amount of borrowed money the specs can use for this purpose.
Maybe regulators should also limit how much pension funds and other safeguarded money can be gambled on these crazy investments.
Congress claims the Amaranth investigation was easy because it was just a single company while evryone, including pension funds, is speculating in the energy markets today.
That’s not a good enough excuse. If Congress and regulators don’t act, the nonsense will never end.
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As I expected, the number of jobs reported on Friday was higher than Wall Street expected.
Thursday I’ll tell you why the June employment report was hogwash and what borrowing costs will do next. john.crudele@nypost.com
