(NOT SO) CHEAP POLITICS

Obama’s latest ploy to stabilize gas prices would do “the exact opposite”

President Obama’s plan to spend $52 million to impose stricter regulations on the oil market would increase gas price volatility, Reuters reports. 

Under Obama's request to Congress, the Commodity Futures Trading Commission (CFTC) would determine how much speculators need to pay to trade U.S. crude oil futures, in theory increasing the amount when prices move too far, too fast.

But economists and traders cautioned that pushing smaller investors out of markets would only hand greater influence to the largest hedge funds and Wall Street banks. Ultimately, there may not be enough traders left to do business with oil producers and consumers looking to hedge their needs.

"Reduced liquidity often means greater volatility," said broker Jay Levine at Enerjay LLC in Maine.

"That's the exact opposite of (Obama's plan's) purpose".