Post by Steve Gardner on May 21, 2008 7:30:11 GMT
I don't see how this can possibly have a happy ending.
OPEC have, for a long time now, been telling the US and the rest of the world that the rise in oil prices is a function of market speculation and not a supply deficit. You see this confirmed nearly every day when a new record high in the price of oil is blamed on something that hasn't yet occured, as it did yesterday when traders pushed the price up on concerns that China would need a considerable increase in supply in order to help rebuild following the quake.
I know this bill targets manipulators too, but you only have to look at the headline to see where the emphasis lies.
Source: Reuters
OPEC have, for a long time now, been telling the US and the rest of the world that the rise in oil prices is a function of market speculation and not a supply deficit. You see this confirmed nearly every day when a new record high in the price of oil is blamed on something that hasn't yet occured, as it did yesterday when traders pushed the price up on concerns that China would need a considerable increase in supply in order to help rebuild following the quake.
I know this bill targets manipulators too, but you only have to look at the headline to see where the emphasis lies.
Source: Reuters
WASHINGTON (Reuters) - The U.S. House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.
The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.
The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.
The legislation also creates a Justice Department task force to aggressively investigate gasoline price gouging and energy market manipulation.
"This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities," said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.
The lawmaker said Americans "are at the mercy" of OPEC for how much they pay for gasoline, which this week hit a record average of $3.79 a gallon.
The White House opposes the bill, saying that targeting OPEC investment in the United States as a source for damage awards "would likely spur retaliatory action against American interests in those countries and lead to a reduction in oil available to U.S. refiners."
The administration said less oil going to refineries would limit available gasoline supplies and raise fuel prices.
Foreign investment in U.S. oil infrastructure has declined in the last decade. But the state-owned oil companies of several OPEC nations are owners of U.S. refineries, and those investments could be affected if the legislation becomes law, said Arlington, Virginia-based FBR Capital Markets Corp.
The bill also requires the Government Accountability Office to carryout a study on the effects of prior oil company mergers on energy prices.
The Senate would still have to approve the House measure.
The Senate previously approved similar legislation as part of a broad energy bill. However, the OPEC-suing provision was removed after White House opposition in order to get the underlying energy legislation signed into law.
