WASHINGTON Four Democratic senators on Thursday asked for an investigation into a government report on oil prices that the lawmakers said was based on flawed information.
In a letter to the inspector general of the Commodity Futures Trading Commission, the senators criticized an interim study released last month that said fundamental supply-and-demand factors were to blame for the recent run-up in oil prices. The senators said the study, which played down the role of speculation, was based on inaccurate data.
They also questioned the timing of its release. The report was issued a few days before the Senate voted not to move forward on legislation that would have required the commission to set limits on trading in oil markets by investors and speculators.
"The report, which specifically addressed speculation, appears to have been created and released to influence that Senate vote, which would be highly improper, in our view," wrote Sens. Ron Wyden of Oregon, Byron Dorgan of North Dakota, Maria Cantwell of Washington and Bill Nelson of Florida.
Democrats have pushed the legislation designed to curb speculation, saying the rapid increases in oil prices have coincided with big rises in trading on oil future markets. Many Republicans have argued that high gasoline prices are caused by the basic economics of supply not meeting demand.
In the interim report released July 22, the Interagency Task Force on Commodity Markets said its preliminary analysis "does not support the proposition that speculative activity has systematically driven changes in oil prices." The task force, chaired by the CFTC, was formed in June to examine the sharp run-up in oil prices.
In Thursday's letter, the four senators said the report was not based on the best available data. They pointed to a July 18 announcement by the CFTC that they said indicated some of the information used in the report was inaccurate. That announcement said speculative investors had played a larger role in some oil trading than originally thought.
"We are greatly disturbed that although CFTC staff obviously knew that underlying data used to prepare the interim report was seriously flawed, the interim report was nonetheless publicly released," the senators wrote, asking the inspector general to look into how the report was prepared and "why it was released after the CFTC staff had determined that critical information upon which it was based was inaccurate."
Dennis Holden, a spokesman for the CFTC, said Thursday the commission had no comment on the letter.
Upon releasing the report, the task force said it planned to continue evaluating markets. It said it issued the interim report "in light of the recent increases in energy prices and the resulting concerns of the public and policy makers."
Dorgan said the CFTC was a "referee" to make sure the market works.
"The so-called referee here has been willfully blind," he said.
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Commodity Futures Trading Commission: www.cftc.gov/