Probing Oil Market

I have my doubts on market speculations being the prime force driving oil price higher recently. Dwindling supply and outstripping demand in the energy market, the basics in world economics mostly are playing major part in rising fuel price in the pump. However, there should be government and independent organizations monitored procedures in place so that no abuse of the system like market manipulation is taking place from various active players. Last year in U.S., The Commodity Futures Trading Commission started a probe in possible price manipulation in energy market. Here is a few quotes from Globe and Mail:

"The CFTC said in a statement that in December, its enforcement unit “launched a nationwide crude oil investigation into practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts.”

It added that all enforcement inquiries are focused on ensuring markets are properly policed for manipulative and abusive practices. “In addition to the CFTC's ongoing examination of the role of fundamental economic forces and new investors in the recent commodity market price increases, the agency continues to pursue one of its primary missions – to deter, detect, and punish futures market manipulation,” the regulator's statement said."

An example is given on the type of probe that CFTC is enged in: "the CFTC 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.”

At least on the surface, this ongoing investigations and initiatives by CFTC are commendable as it is the dire necessity in this anxiety filled times from growing fuel prices so that oil price "reflect fundamental economic forces of supply and demand, free of manipulation and fraud".