NEW YORK ( TheStreet) -- Last week, the Federal Energy Regulatory Commission (FERC) fined former Amaranth Advisors' lead energy trader Brian Hunter $30 million in a civil penalty for violating the Commission's anti-manipulation rules in the natural gas futures market and concluded that "this amount is appropriate and sufficient to discourage Hunter and others from engaging in market manipulation."

Apparently, President Obama does not agree when it comes to the message FERC sent about manipulation in the energy markets, announcing last Friday that his administration has created a financial task force to look into manipulation in the oil markets specifically.

The political sound-biting on both sides of the divide was swift and typical in response to the Obama administration salvo, with cynics noting that the oil manipulation "witch hunt" coincided with the high gasoline prices and with headlines that high prices at the pump could de-rail Obama's re-election campaign. Detractors argue it's a sign of an administration helpless to do anything about high gasoline prices wanting to give the appearance of taking a stand on behalf of the angry masses -- and merely lip service.

Skeptics have noted that close to three years after the financial crash, there has not been one indictment of a Wall Street executive for the massive speculative bubble that destroyed the U.S. housing market and economy.

Phil Flynn, market strategist at PFG Best, did not pull any punches in his assessment of the Obama administration oil prices fraud task force, writing, "They have this insane belief that if somehow we limited speculating in oil, that somehow the price would be magically lower. That is ridiculous and naïve.... Acknowledge what is happening in all commodities, even ones that are not traded on exchanges.... We are being driven by geopolitics, deficits, wars and the growing lack of confidence in the currency that the commodities are traded in.... Before you know it, the next thing they will try to do is confiscate commodity traders' profits as opposed to just wasting our money on a publicity grabbing, self servicing investigation."
State Your Opinion on Obama's Oil Price Crusade
Obama's Oil Price Crusade: Merely Lip Service?

Market experts have noted that ever since the financial meltdown, there has been never-ending discussion of a key market measure that could limit speculation in commodities trading -- speculative position limits imposed by the Commodity Futures Trading Commission (CFTC). A financial fraud task force may not be necessary if the CFTC would approve this long-debated measure. Unfortunately, the fate of this limit rule remains in limbo.

With gasoline prices reaching $4.50 in Hawaii, and $5 in California, some CFTC watchers believe the tide is turning in favor of a tougher stance from the CFTC. Jim Collura, vice president of government affairs for the New England Fuel Institute and spokesman for the Commodities Markets Oversight Coalition, wrote in an email to TheStreet, "I do think the tide of public opinion will have an effect on the proposed speculative position limits rulemaking the CFTC -- if it were to come to a final vote now. Unfortunately the commission has not yet indicated when a final rule may be ready for a vote. The commission currently has two votes in favor, one vote opposed and two undecided. The question is whether or not one of the two undecided voters will be persuaded by the public outrage, and I think that one or both will be."

University of Maryland law professor Michael Greenberger, who has testified on Capitol Hill about speculation in the commodities markets, took issue with critics who say the Obama administration is playing a game of strategic misdirection with its oil-prices manipulation task force. The Maryland law professor and commodities trading expert believes that if it's properly set up by the Justice Department, and bringing together Justice with the Securities and Exchange Commission, Department of Energy, Department of Agriculture and CFTC, the chances are strong that serious wrongdoing could be uncovered and indictments brought against traders.

Maryland Law's Greenberger is also of the opinion that position limits are only part of the solution. "Look at Enron. Look at Brian Hunter. These are very sophisticated surgical purchasing of long futures contracts and avoidance of position limits, and these markets are opaque and need to be investigated."
State Your Opinion on Obama's Oil Price Crusade
Obama's Oil Price Crusade: Merely Lip Service?

Greenberger said that with only two clear votes on the CFTC measure, the quickest way to deal with this issue is to is start a grand jury investigation, and that the argument that there is legal speculation in the free markets is a weak position to defend.

"The Saudis have said there is excessive speculation. Goldman Sachs has said there is excessive speculation. It's not a question of whether there is legal speculation or not. This is looking at criminal conduct," the law professor said, noting that it has been demonstrated that derivatives markets are dysfunctional if they have excessive speculation.

President Obama made sure to couch his task force within the thesis that there is no simple fix for high gasoline prices. And when it comes to speculation in the commodities markets, and in congressional testimony over the past few years, it hasn't been about energy, natural gas, or oil specifically, using either Enron or Amaranth, or any single actor, to reduce the issue to a convenient villain. In fact, reading Congressional testimony one is as likely to discover reams of statistics on wheat trading dynamics that rival commentary on energy trading specifically. Yet with splashy IPOs like the upcoming debut of London-based Glencore -- the "Goldman Sachs of commodities" -- and Glencore sitting on a nation's worth of physical commodities inherent in its $11 billion valuation, the tension between free market liquidity and excessive speculation profiting a handful remains a headline designed for the masses in a world of inflation.

"Yes, you need speculation for liquidity, but there are twice as many speculators as commercial entities needing to hedge their risk. This is not supposed to be a casino, and even Vegas has cap controls on casinos," Greenberger said.

The Big Oil companies have benefited from the recent run up in oil prices, as have the oil refiners, and Big Oil is often enough the easy target of the government when its profits balloon on high prices at the pump. Indeed, Big Oil company persona non grata in the U.S., BP ( BP), is expected to report a big profit in the first quarter on Wednesday, of roughly $5.5 billion, while Gulf of Mexico residents and businesses still complain about the claims payment process one year after the oil spill.

BP kicks off earning for Big Oil this week, but all the major U.S. oil companies follow in a matter of days and are expected to be flush with first quarter cash thanks to the high oil prices. Chevron ( CVX) said in its interim first quarter report that high oil prices will buoy earnings. Chevron reports on April 29.

Big Oil is a target of the federal government regardless of the debate over speculation. President Obama was pressing congressional leaders this week to cut out tax breaks for oil and gas companies. In a letter released by the White House, Obama wrote of the issues in the energy markets and the difficulty in trying to lower gas prices this way, "One of those steps is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil."

House Leader and Ohio Republican John Boehner, told ABC News on Monday that tax breaks for the oil and gas companies deserve a look, and noted that, "Everybody wants to, to go after the oil companies. And, frankly, they've got some part of this to blame."

Inventory levels of crude at the U.S. Cushing, Oklahoma stockpile remain at historically high levels, and energy market experts pound the table with the fact that there is no fundamental shortage of oil. Following the conventional wisdom of a Middle East risk premium, Exxon Mobil ( XOM) CEO Rex Tillerson has said on CNBC that the high oil prices are about where the next disruption in the Middle East occurs, causing the next barrel of oil to be taken offline. It's not the 1.6 million barrels already taking offline in Libya that keeps oil prices tilted to the upside. It's the "Libya + 1" scenario at work.

Meanwhile, oil refiners CVR Energy ( CVI) and Western Refining ( WNR) are up 70% and 50% year-to-date, respectively.

Still, the law professor and frequent commenter on commodities trading, Michael Greenberger, said it's not about Big Oil or the refiners, and added with confidence, "If Justice appears to be using their subpoena power then oil prices will drop. Traders will run scared. These guys don't want to end up in jail. It wouldn't take long to uncover and it would be a great mistake if Justice didn't take it seriously and put their shoulder to the wheel."
State Your Opinion on Obama's Oil Price Crusade
Obama's Oil Price Crusade: Merely Lip Service?

Of course, for the U.S. public, it's déjà vu all over again with $4 gasoline in 2008 and now in 2011 -- and in the intervening years, the political will has not existed to even get traction on the position limit issue. Greenberger bets that when the financial crash sent oil from $140 to $35 overnight it made it easier for the public to think that gasoline prices would remain manageable without regulatory fixes. "I don't think that will happen a second time, and that's why criminal investigations are needed."

Commodities Markets Oversight Coalition spokesman Collura remains cautious on the outcome of the tough talk from the Obama administration. "It will be interesting to see whether or not the 'task force' really develops legs in order to have an effect on the bullish speculative activity in commodity prices. I believe that the White House assembled the task force not only to send a message to the public that it acknowledges the problem and is trying to do everything it can about it, but also a message to the market."

Collura added that the renewed focus of the White House and the formation of the task force will have ripple effects across the administration and in the Congress, and noted that this week the CFTC announced that it's moving to prohibit mutual funds from evading regulation and investment caps on commodities via offshore subsidiaries. "I think you'll see more of this sort of activity as fuel prices stay at or above $4/gallon," Collura said.

Indeed, it all raises the question, Is the Obama oil prices task force no more than lip service for the angry masses? Take our poll below, and see what TheStreet thinks....

Is the Obama oil prices task force a legitimate campaign, or just lip service for the angry masses?

Lip Service -- The Obama oil prices task force is just politics.
Legitimate Campagin -- Obama is serious, and illegal oil trading schemes are real.

-- Written by Eric Rosenbaum from New York.

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>To contact the writer of this article, click here: Eric Rosenbaum.