CFTC Forms Interagency Task Force To Probe Commodity, Energy Trading

by StockJockey

Tuesday, June 10, 2008 - 2:25 pm

Are you ready for more volatility in the commodity markets? Trying to decipher the movements can often be a fruitless exercise, but the government is going to try, as the latest announcement from the CFTC shows:

In light of the recent rise in crude oil and other commodity prices and the influx of new investors into commodity futures markets, the Commodity Futures Trading Commission (CFTC) is announcing the formation of an interagency task force to evaluate developments in commodity markets. The task force – which includes staff representatives from the CFTC, the Federal Reserve, the Department of the Treasury, the Securities and Exchange Commission, the Department of Energy, and the Department of Agriculture – will examine investor practices, fundamental supply and demand factors, and study the role of speculators and index traders in the commodity markets.

High commodity prices are posing a significant strain on U.S. households and the announced Interagency Task Force will aid public and regulatory understanding of the forces that are affecting the functioning of these markets. The Interagency Task Force will strive to complete its work as expeditiously as possible, and will make public the results. CFTC

Poorly handled media events last week by Michigan Congressman Bart Stupak added to the drama in the energy pits, and the jawboning is likely to continue. Is it all BS, or do they have a chance at stamping out abusive practices that may or may not be taking place?

The CFTC is webcasting the event, and the news might once again be roiling the energy markets. At least if you look at the move in oil (USO-AMEX) today, and particularly this afternoon.. Bearish oil news was out this morning, but the selloff accelerated 1PM, when the meetings began.

Combine this with Bernanke’s tough talk, and Paulson’s comments over currency intervention. Mix in a little chatter from the middle east, and something clearly is afoot.

Can the markets break the central bankers? Sorry, Bernanke, this not 1985.

There has seemingly been very little international cooperation of late, perhaps not too surprising with the ECB dominated by ex-Bundesbank technocrats. Frankfurt is one tough town, and Trichet certainly is toeing the line. Keep in mind he has only a inflation mandate, not growth, and maybe we should not have been that surprised by his comments last week.

CFTC Webcast: June 10, 2008
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Everyone has an opinion on commodity prices, and the impact of the dollar:

The world is in two half nelsons, claims David Buik of BCG Partners

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Meetings convened at 1pm...when oil picked up steam to the downside. Coincidence? Maybe, lots of crosscurrents out there

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Hopefully regulators will muzzle Bart Stupak, who did not acquit himself very well last week

June 5th

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CFTC Announces Interagency Task Force to Study Commodity Markets
CFTC Website

Previously

Why Oil Spiked: Connecting the Dots with Eric Bolling
1440 Wall Street
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