Article courtesy of the ICPA

Keep Wall Street Honest, Call Congress Today!

Virtually all the natural gas, electricity and petroleum sold in the U.S. and worldwide is traded first as commodities in contracts on commodities exchanges worldwide.

As agency of the U.S. Government, the Commodities Futures Trading Commission (CFTC) is suppose to oversee the daily trading of contracts to ensure markets operate free from manipulation

Nineteen individuals were indicted in the Enron scandal, a scandal that involved Enron's manipulation of the California electricity market through trades of electricity contracts. Amaranth is now at issue under allegations it manipulated the natural gas markets.

Some may believe energy market instability during the last seven years has arisen through an imbalance of supply and demand, while others contend manipulation of the type seen in the Enron and Amaranth scandals is at fault.

S.2058, Senator Carl Levin's (D-MI) "The close the Enron Loophole Act", started with a GAO investigation of the CFTC's authorities as initially requested by Congressman John Larson. Senator Lieberman is a cosponsor of the senate legislation.

The ICPA Independent Connecticut Petroleum Association is our association working with us to protect consumers and has been the driving force with hundreds of similar associations around the country to get this important legislation passed.

Join with us in contacting our Connecticut Congressional delegation and asking each and every one of them to reaffirm their support to pass the S.2058 legislation and to make sure energy markets are properly overseen by government and free from manipulation.

Also visit www.FightOilPrices.com

 

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Understanding factors that drive the volatility in residential heating oil prices.

Regional operating costs:

Prices in remote locations are also impacted by higher transportation costs. Operating costs of dealers can vary substantially with location as well. State and local fees and regulations vary widely from one locale to another.

Surges: Drastic upshift in prices over a very short period of time caused largely by unplanned events. Some of the conditions that initiate a surge in prices are listed below.

Refineries cannot meet unexpected demands:

Refineries do not just produce heating oil. It is but one of the byproducts of their manufacturing process. It is not economically feasible for them to produce excessive amounts of surplus gasoline, diesel, and other distillate products to produce heating oil for a short-term demand.

Unexpected rapid drop in temperatures:

A rapid drop in the temperature in a region can have a severe effect on supply and demand. Customers are using more fuel oil unexpectedly and inventories are being depleted faster than they can be replenished. Rivers and harbors may be frozen or other disruptions to the supply chain may occur.

Competition in local markets:

Areas with a limited number of suppliers may also net higher prices. This is typically true in rural or remote areas where the competitive advantage of choosing between numerous providers is denied.

Changes in the cost of crude oil:

As the principal cost component of all fossil fuels (at 42 percent of total cost), changes in the price of heating oil fuel are closely linked to the price refineries pay for crude oil. Price increases are complex and intermingled with one another. Global supply and demand as well as the state of the global economy and even the weather determine crude oil prices. The Organization of Petroleum Exporting Countries (OPEC) and other factors also influence supply and prices as well.

STAY WARM!

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