As gas prices pinch, Obama targets oil speculators

Obama -- seeking to sympathize with Americans hurt by pain at the pump as they emerge from a damaging economic slump -- admitted his plan would not lower gas prices right away, but said it would impact speculation which hurts consumers.

"Obviously, rising gas prices means a rough ride for a lot of families. There are families in certain parts of the country that have no choice but to drive 50 or 60 miles to get to the job," he said.

"When gas prices go up, it's like an additional tax that comes right out of your pocket."

Obama said he would ask Congress to fund more surveillance and enforcement staff to monitor oil futures trading at the US Commodity Futures Trading Commission (CFTC).

He also wants to finance technology upgrades to aid oversight and surveillance of the energy market and increase civil and criminal penalties for those found guilty of market manipulation from $1 million to $10 million.

Other steps will include measures to help the CFTC deal with increased price volatility and to prevent excessive market speculation and disruption.

"We can't afford a situation where some speculators can reap millions while millions of American families get the short end of the stick. That's not the way the market should work," Obama said.

Obama is under increasing political pressure for more action on high gasoline prices, which while low by some European standards, on Tuesday averaged $3.90 for a gallon of regular gasoline, according to the US Energy Information Administration.

Republicans, saying Obama is to blame for high energy prices, are demanding more oil and gas drilling in America, and want the president to endorse the blocked Keystone XL pipeline project from Canada to the US Gulf Coast.

Republican candidate Mitt Romney is trying to blame the president for the painfully high gas prices, as he cranks up his campaign for the November 6 election.

Obama admitted in his statement in the Rose Garden of the White House that the moves he outlined may not immediately be felt at the gas pump.

"None of these steps by themselves will bring gas prices down overnight. But it will prevent market manipulation and make sure we're looking out for American consumers."

An Obama aide, speaking on condition of anonymity, declined to speculate about how much oil market manipulation added to a gallon of gasoline or how Obama's measures could ease the burden for drivers.

And he argued that gasoline prices were influenced by global factors including tensions in the Middle East, the state of economic growth around the world and other oil supply factors.

But in a cutting attack, Senate Republican leader Mitch McConnell said that Obama had become the kind of leader he said he would never be -- pushing small-bore projects purely for political gain.

"If I were to guess, I'd say today's proposal by the president probably polls pretty well. But I guarantee you it won't do a thing to lower the price of gas at the pump. It never has in the past," McConnell said.

"I mean, weren't these kinds of gimmicks and stale talking points precisely the kind of thing President Obama campaigned against? I thought he was offering something new and different."

John Boehner, Republican speaker of the House of Representatives, complained that Obama already had all the enforcement tools he needed to combat oil market manipulation.

"So instead of just another political gimmick, why doesn't he put his administration to work to get to the bottom of it?"