Oil dealers tell Congress: It's time for action

Oil dealers tell Congress: It's time for action

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Story Published: Jun 26, 2008 at 6:15 PM PDT

Story Updated: Nov 20, 2008 at 10:17 PM PDT

By Bryan Johnson

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A Washington state group of petroleum product dealers is asking its members to call Congress and demand regulation of oil futures markets.

The group, known as Washington Oil Marketers, says the price of oil could be cut by $25 to $30 a barrel if Congress would demand that traders be identified as if they prohibited insider trading in oil futures.

In North Bend, where the group met Thursday, the price of regular gas was about $4.44 a gallon - a price so high that gas station owner Bryan Wyrsch says he is selling about 1,000 fewer gallons of gas every day.

“You see a decrease in people purchasing gas and buying smaller vehicles but the price hasn't come down," he said. "Demand drops. Prices still go up.”

Wyrsch says he and other station owners still wonder why prices aren’t coming down.

Members of the Oil Marketers bring gas to Wyrsch’s station and others selling brands from Shell to Conoco and Chevron to Exxon.

Gas marketer Craig Eerkes told the group Thursday: “It's wrong when the market can be manipulated by the very people who are producing the product. That's wrong.”

Eerkes believes the lack of transparency and control allows the market to be rigged. He explains it this way:

An oil company puts oil futures up for bid on the commodities market. A buyer, who may have absolutely no interest in oil, bids $140 a barrel. He plans to sell his “paper” later.

Eerkes believes that many of these “speculators” hold stock or interests in the oil producers. He said the net result of such speculation is that the customer loses.

He says he tried to explain this to Congress last year: “A year ago, in July, I testified before Congress. It was like looking at deer in the headlights. They didn't understand it.”

Now he says there are 20 bills pending which would regulate the commodities market. He admits there is fierce opposition to the legislation, but he told KOMO 4 News: “There are a lot more people in the United States than there are oil producers.”

Eerkes says trading is regulated on Wall Street and insider traders face jail sentences.

But in oil, he said, “No one knows who's buying, who's selling, who's speculating.”

His group now believes oil-producing countries are secretly bidding on their own oil to keep prices high.

He wants Congress to act now.


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