Thursday
Jul102008
How to solve the oil problem: Do something about it
Thursday, July 10, 2008 at 2:25PM
Witness Walter Lukken of the Commodity Futures Trading Commission (CFTC) testified before the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. Lukken tried to explain the multitude of issues contributing to rising oil, corn, and other commodity prices and what the CFTC is doing to address the problem.
At one point, Chairwoman DeLauro (D-Conn.) began to raise her voice in frustration. She said that CFTC, which is in charge of assessing the commodity price problem, should also be taking action, but nothing is being done.
It is the price of onions, not oil that has risen the most since 2006, Lukken said. Oil and corn prices have risen 100 and 300 percent respectively, but onion prices have gone up 400 percent since 2006. 70 percent of oil in the U.S. is imported, Rep. Marcy Kaptur (D-Ohio) said. Money is moving away from America and into other financial markets, Kaptur said.
When prompted by Rep. Ray Lahood (R-Ill.) to answer questions about rising oil prices in simpler terms, Lukken said, “We are consuming more than we are producing.” Rep. Jack Kingston (R-Ga.) asked Lukken if any oil suppliers were hoarding inventory. Lukken said there is no evidence of hoarding.
A number of representatives said they were confused about the terminology Lukken was using. Chairwoman DeLauro observed the confusion and said that the commodity market is complex and so the answers to rising oil prices and other commodities will also be complex.
At one point, Chairwoman DeLauro (D-Conn.) began to raise her voice in frustration. She said that CFTC, which is in charge of assessing the commodity price problem, should also be taking action, but nothing is being done.
It is the price of onions, not oil that has risen the most since 2006, Lukken said. Oil and corn prices have risen 100 and 300 percent respectively, but onion prices have gone up 400 percent since 2006. 70 percent of oil in the U.S. is imported, Rep. Marcy Kaptur (D-Ohio) said. Money is moving away from America and into other financial markets, Kaptur said.
When prompted by Rep. Ray Lahood (R-Ill.) to answer questions about rising oil prices in simpler terms, Lukken said, “We are consuming more than we are producing.” Rep. Jack Kingston (R-Ga.) asked Lukken if any oil suppliers were hoarding inventory. Lukken said there is no evidence of hoarding.
A number of representatives said they were confused about the terminology Lukken was using. Chairwoman DeLauro observed the confusion and said that the commodity market is complex and so the answers to rising oil prices and other commodities will also be complex.
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