$4 a Gallon

The pain at the pump is going political this week. The President and his wannabe successors are pushing pie-in-the-sky proposals--more drilling in Alaska (Bush), gas tax holidays (McCain) and new taxes on oil companies (Obama)--but Congress is taking aim at one of the underlying reasons for skyrocketing prices--speculation.

"(A)s gas reaches a national average of $4 a gallon for the first time in the nation’s history," reports The Hill, "some see the makings of a consensus on Capital Hill: making it harder for investors to buy crude on the commodity futures markets.

"Critics say the increased participation of non-commercial investors that don’t intend to use the commodity--as opposed to, say, airlines that also buy crude--has helped raise prices."

The focus of Congressional pressure is the government agency charged with overseeing the gambling on oil. According to a spokesman for the Senate Energy and Natural Resources Committee, “More and more senators are questioning the adequacy of the [Commodity Futures Trading Commission’s (CFTC)] regulatory oversight and...are bothered by the role that speculation and non-commercial, institutional investors are having in preventing energy markets from functioning properly.”

The quickest fix would be new curbs on pension funds, endowments and other institutional investors that pump money into commodities index funds, driving up demand and prices. The Goldman Sachs fund attracted $260 billion last year, compared to $13 billion five years earlier.

According to the McClatchy newspapers, complicating any effort to harness speculation is the 30 percent of trading in crude oil in "dark areas"--markets in London and Dubai--not regulated by the CFTC but could be by the President with "a snap of his fingers."

A former CFTC director of trading is quoted as saying, "Essentially this could be ended this afternoon if the Bush administration had the stomach to do it."

But with an army of oil company lobbyists besieging the White House and Congress, don't bet your gas money that it will happen.