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Oil on Trial - Fast Money Recap (5/21/08)

"Large oil companies were asked to answer for high oil prices as they testified before the Senate on Wednesday. The companies defended the prices, saying they were based on normal supply and demand…"

This is not true; the oil executives said there was ample supply!!!! (source: CSPAN)

"Michael Masters testified before Congress that speculation is driving oil and suggests preventing pension funds from investing in oil and would make it more difficult for financial institutions to forego limits on speculative positions."

This is also 'supply and demand'…the kind that makes you wonder where all of those Enron traders are working now. That story (Enron) is now worth a quick review. The similarities of political and corporate corruption are a little scary when the implications of national consequences are compared to what happened in CA.

Here are a couple excerpts from en.wikipedia.org/wiki/... :

After extensive investigation The Federal Energy Regulatory Commission (FERC) substantially agreed in 2003:[4]
"...supply-demand imbalance, flawed market design and inconsistent rules made possible significant market manipulation as delineated in final investigation report. Without underlying market dysfunction, attempts to manipulate the market would not be successful."
"...many trading strategies employed by Enron and other companies violated the anti-gaming provisions..."


Former Governor Gray Davis: "I inherited the energy deregulation scheme which put us all at the mercy of the big energy producers. We got no help from the Federal government. In fact, when I was fighting Enron and the other energy companies, these same companies were sitting down with Vice President Cheney to draft a national energy strategy."