President Obama calls for investigation into oil speculators
A petroleum worker walks through a Libyan oil refinery in Al Brega, Libya. Libya has the largest oil reserves in Africa and petroleum exports account for 95 percent of the country's export earnings.
STEVE CHIOTAKIS: The price of oil's topped $112 a barrel today. And as the price keeps going up, and gas prices do the same, President Obama is being pressured to do something about it. So the president's ordered Attorney General Eric Holder and a Justice Department task force to look into the possibility of speculation as a reason for oil price volatility.
Jill Schlesinger is editor at large for CBS/MoneyWatch, and she's with us live -- as she is every Friday morning -- from New York. Good morning Jill.
JILL SCHLESINGER: Good morning.
CHIOTAKIS: Is there really speculation going on?
SCHLESINGER: Yes, there's speculation, but it's not illegal. The oil market, like any other securities market, is make of up of lots of players, including speculators. So in oil we have two types. We have end users like airlines -- they use the market to protect against future price fluctuation. And then we have speculators. Mutual and hedge funds, your neighbor door who bought an exchange traded fund -- they're betting on the same price fluctuation.
CHIOTAKIS: All right, you say it's not illegal Jill, what can be done to ease these major fluctuations of prices?
SCHLESINGER: Well, you know one thing that can be done is the Commodities Futures Trading Commission, the regulator, can impose what's called position limits. That limits the size of the bets that speculators can make. And the CFTC has the power to curb speculation and the Dodd-Frank bill calls for focus on position limits and exchangers and regulations can also change margin requirement. That can tamp down the swings. But thus far, they haven't really done much.
CHIOTAKIS: All right, Jill Schlesinger from CBS/MoneyWatch. Jill thanks.
SCHLESINGER: Great to be with you.