"The commission said it is investigating potential abuses in the way crude oil is purchased, shipped, stored and traded nationwide, but did not reveal details. Also on Thursday the agency announced a handful of other initiatives designed to increase transparency of U.S. and international energy futures markets.
For example, the trading commission said it will immediately require monthly reports from institutional investors who manage funds designed to mimic the price of crude oil and other energy futures. The goal, the agency said, is to identify the amount of such index trading and to "ensure that this type of trading activity is not adversely impacting the price discovery process."
The agency also said it has reached an agreement with its British counterpart and with InterContinental Exchange Inc.’s Futures Europe to expand surveillance of energy futures contracts with U.S. delivery points, including the benchmark West Texas Intermediate crude, which trades on the Nymex." SFGate
I have thought for some time that the recent catastrophic rise in crude prices is not directly related to long term supply and demand issues, although those are certainly there in the background.
No, there is a short term supply problem caused by politically motivated regional suppliers who have found it easy to toy with the spot market enough to encourage traders of one kind or other to drive up prices of future deliveries in what can only be described as a "tulip" scenario. The announcement of increased surveillance of these traders and their allies in the business intelligence world will stress the "skin" of the bubble and we will see something interesting. It has already begun. pl