Remember those crazy swings in oil prices last year, when the cost of a barrel jumped by $25 in a single day and consumers paid record amounts at the pump? Back then, the Commodity Futures Trading Commission reported it was a matter of supply and demand.
That was back then. Today the Wall Street Journal reports (subs. requ'd.) that the CFTC is planning another report, one that will pin the fluctuation on speculation by oil traders. Bart Chilton, one of four CFTC commissioners, tells the WSJ the original report to Congress was based on "deeply flawed" data. From the WSJ:
Mr. Chilton dissented from the 2008 CFTC report, saying the agency's conclusions didn't go far enough. He expressed doubt about the amount and type of data received, which he called limited and unreliable. "We didn't have all the information we should have," he said. "And we gave it to Congress anyway, and we spun it."
Chilton tells the paper the new report will draw from a wider pool of sources. The CFTC begins hearings today on whether to limit speculation in the commodities market.