How's the War on Speculators going, Mr. President?

Remember when oil speculators were declared enemies of the people – the true villains behind President Obama’s rising gas prices? 

“At a time when American consumers are feeling pain at the pump, it is critically important to ensure that illegal manipulation, fraud, and market rigging are not contributing to gas prices increases,” the White House declared.  Of course, Obama’s “solution” to this terrible “problem” involved spending piles of taxpayer money.  His “crackdown” on oil speculators involved $52 million in new funding, including a six-fold increase in staff for the Commodity Futures Trading Commission.  He also wanted to increase the fines for market manipulation by 1000 percent.

The War on Speculators was declared by the President on April 17, 2012, in a very high-profile public appearance, with an accompanying full-court media press.  That’s just about one month ago.  How’s it going, Mr. Obama?  Can we get a status update?  Have we even nailed down the distinction between legal “speculation” and illegal “market manipulation” yet?

As far as I know, everything the President called for is still in the “proposal” stage.  Just four days ago, the International Energy Agency issued a report warning that Obama’s proposals, which include raising margin requirements for oil futures trading, “might increase price volatility and concentrate market share in the hands of large speculators, while having no effect on price levels.”  As the Financial Times explains, increasing the margin requirements means that speculators would have to put more money on the table when they purchase futures, effectively pricing the little guys out of the market.  It doesn’t sound as if any of the policies the IEA warns against have been enacted yet.

The reason I’m asking for a status update on this urgent crusade – which is so important that Obama ignored repeated assertions by both experts and regulators that speculation doesn’t cause high gas prices, and wanted to drive America even further into debt to finance his witch hunt – is that oil prices have been coming down a bit.  They’re still much too high, but the price seems to have leveled off for the time being.  And according to this report from CNN MarketWatch, it sounds as if those Evil Speculators had something to do with it:

Speculators in the oil market slashed their bets in the week ended May 8 on oil futures rising amid sharp falls in prices as concerns over U.S. economic recovery and the euro-zone’s debt crisis fuelled fears global oil demand may fall.

“The roughly $10 drop in the price of oil at the beginning of May was accompanied by speculative financial investors exiting on a grand scale,” Commerzbank said in a note.

[…] “The collapse happened in line with a nearly $10-per barrel fall in WTI in the week ending May 8, which may have caught speculators off guard, fuelling the massive sell off, JBC Energy said in a note.

What?  How can this be?  How could speculators be leaving the market on a grand scale, after getting caught off guard?  I thought these guys controlled the price of oil.  I thought they were artificially inflating that price by creating the artificial perception of a shortage.  Why did they stop?  Are they like bloated ticks, dropping off the market after sucking their fill of financial blood?  Are they artificially depressing the price now, as part of some nefarious long-term plot?  If so, will Obama’s witch hunters persecute them for it?

Instead of “manipulating” the market, it certainly appears that these Evil Speculators are responding to conditions.  The weakening U.S. and European economies are reducing global demand, as the former teeters on the edge of a double-dip recession, and the latter may have already tumbled over the edge. 

Just imagine what we might be able to do about gas prices if we stopped allowing a failed President to distract us with expensive fairy tales about shadowy market villains, and actually increased supply to meet that falling demand!