Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.
The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things.
First, the data reveals that excessive speculation by banks and others is the driving force in oil markets, pushing prices beyond the supply-demand fundamentals. Who wins when prices rise? Wall Street traders that are engaged in speculating. Who loses? Every consumer who fills up at the pump.
Second, this data shows that we need this information to be made public on a regular basis. The companies named – including Goldman Sachs and Morgan Stanley – were significant players in the 2008 price run-up. The public should know who is responsible for high gas prices. It should get this information not just now, three years later, but on a regular basis, within two weeks.
Far from heeding the hysterical calls of corporations that are rushing to use the dissemination of three-year-old records as an excuse to crack down on the Commodity Futures Trading Commission, lawmakers should work with the agency to shine light on the sordid business of oil speculation. For too long, major corporations have reflexively deemed vast swaths of data “proprietary,” thereby removing critical information from the public domain. Company-specific energy trading information should be public to help ensure more transparent markets. Even in equities, the identities of large individual shareholders are publicly disclosed. The same should be the case in commodities.
Further, the information revealed this week provides even more reason for regulators to fully enforce provisions of the Dodd-Frank Wall Street reform law that are designed to curb excessive speculation.