06/05/08 High petroleum prices causing credit crunch

Washington Ag June 5, 2008 A Washington gas station and convenience store operator representing independent operators told a U.S. Senate Commerce Committee hearing this week that "Excessive speculation on energy trading facilities is the fuel that is driving this runway train in crude oil prices." Gerry Ramm, the president of the Inland Oil Company of Ephrata was representing the Petroleum Marketers of America at the hearing. Ramm said the high prices are creating credit problems. Ramm: "Petroleum marketers are going out of business. Farmers are going out of business. We can't get the capital to finance our receivables. Farmers can't get the capital to operate their farms." Ramm called on Congress to revoke the Commodity Futures Trading Commission's so-called "no-action" letters to foreign boards of trade that let their exchanges trade unregulated U.S. oil contracts. Washington Senator Maria Cantwell, who chaired the Senate hearing said in a news release that according to a number of oil industry executives and market analysts, around one-third of today's crude oil price is pure speculation driven by large traders and hedge funds, much of it on electronic futures exchanges free from U.S. oversight. Cantwell told the hearing the Commodity Futures Trading Commission is a toothless tiger and if they don't act she will introduce legislation forcing them to. I'm Bob Hoff.