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Oil prices may be manipulated

NEW YORK (CNNMoney.com) -- Amid soaring oil prices that some say are caused by nothing more than rampant speculation, the government Thursday announced a wide ranging probe into oil price manipulation and said it would get more information on the effect investors are having on the market.

The measures, undertaken by the Commodity Futures Trading Commission after pressure from angry lawmakers, do two things.

First, they'll attempt to gather more information from index funds and other non-commercial users of oil. They'll also seek information on oil trades made outside the U.S. on exchanges like the IntercontinentalExchange Europe (ICE) where the CFTC has no oversight and has been unable to get more detailed information.

The second thing on the CFTC's agenda is an actual investigation into possible price manipulation - most likely by a commercial user of oil like a production company, shipping company, or storage company.

Information gathering

Recent investor interest in commodities is an issue of intense debate. Some say investors, who have been funneling money into oil and other commodities over the last several months amid rising inflation and falling stock prices, are unjustifiably driving up the price of oil and gas simply because they have no other place to put their money.

Others say tight supply and strong demand are the real reasons behind this investor interest, and the market is functioning properly to limit demand and increase supply.

CFTC has previously said that it has not found any evidence that speculators were artificially inflating prices.

"Data used by Commission staff show that price changes are largely unrelated to fund trading," according to written testimony before a Senate hearing earlier this month by CFTC Chief Economist Jeffrey Harris. "Broad-based manipulative forces are not driving the recent higher futures prices in commodities across-the-board."

Neither Harris nor any other economist at the CFTC could not be reached for comment.

More regulation on the way?

According to a chart presented in its congressional testimony it appears the CFTC used data from 2007 to reach its conclusion.

Additional reporting by index funds and other non-commercial buyers of crude will help CFTC make better analysis, said Michael Haigh, head of U.S. commodities research at the investment bank Société Générale and a former economist at the CFTC.

Even so, he doesn't expect the CFTC's overall conclusion - that investors aren't unjustifiably driving up oil prices - to change much.

But he said oil traders see this request for additional information as perhaps a precursor to broader regulation, like increasing the amount of contracts speculators are allowed to hold or raising the amount of money investors have to put down to buy those contracts.

"The fear that this might happen may drive people out of the market," he said. "There could be a run for the gates."

If there is a run for the gates, he said prices may or may not fall, but liquidity would be reduced, leaving the market more vulnerable to manipulation by a single participant.

And that's the second thing the CFTC is looking into - "practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts," the agency said in a statement.

This most likely means manipulation of the physical oil market, not typically done by speculators but rather by commercial players who might literally withhold oil from the market in an attempt to drive prices higher.

The CFTC has found evidence of this in the past. BP recently settled a suit that alleged the company tried to corner the propane market to inflate prices in 2003 and 2004. BP agreed to pay a $303 million settlement.

Haigh thinks it's likely CFTC will find evidence of this again given that the agency has been investigating for six months and has chosen to make it public. But he stressed that a single player acting alone would in all likelihood not have a huge influence on prices.

"It's difficult to imagine a price runup of $90 to $135 being done by one entity," he said.

He believes the CFTC took the unusual step of announcing the investigation to placate angry lawmakers who may be tempted to enact broader regulations on the oil futures market that would hamper trading.

One analyst said the CFTC investigation will have little effect.

"This investigation is just a way for the government to divert attention away from the fact that it hasn't created a viable energy policy," said Mike Fitzpatrick, an analyst at the brokerage MF Global in New York. "Ultimately, fundamentals rule the markets...this investigation is going to wind up producing nothing."

Never pay retail again

NEW YORK (CNNMoney.com) -- Times are tough. The economy is weakening, consumer confidence is at a low and Americans are struggling just to buy basics like gas and groceries. So when it comes to getting goods that fall beyond the bare necessities, shoppers are getting smarter.

Not only has scouring the Web for the best possible price become standard protocol before buying a big-ticket item, but more consumers are employing creative strategies for scoring hot deals on everything from stereos to sweat pants.

Comparison shopping, haggling and swapping discount codes are all becoming mainstream marks of savvy shoppers. And retailers are playing along.

Coupon craze

Swapping online coupons or discount codes is one quick way to score a reduced price. Often simply applying the right coupon or promotion code during the online payment process can mean a savings of 10% to 30% or at least free shipping.

"People are feeling a bit of squeeze and are looking for ways to save money without cutting back their spending," said Barry Boone, owner of currentcodes.com and naughtycodes.com.

Web sites like currentcodes.com list discount codes for a number of online retailers from Amazon to Zappos. If you find a code to an online store you're shopping at, just copy it and paste it into the "promotional code" box in the checkout area of the retailer's Web site.

Printable coupons, which can be used in stores, are also readily found online at various Web sites and blogs like printable-coupons.blogspot.com and wow-coupons.com.

And sellers are taking note, offering more coupons more often as the coupon sharing sites surge in popularity.

According to a recent survey conducted by retailmenot.com, 63% of respondents said they would not make a purchase if there was no deal attached. The coupon site expects 4 million visitors in May, up 260% from a year ago, according to co-founder Bevan Clark.

Clark says the savings shouldn't end there. He urges online shoppers to check a comparison service like pricegrabber before making a purchase, and then go to a coupon sharing site "to really stack on the savings," and lastly, watch for any future price drops with a price protection service like priceprotectr.com. Many retailers will refund the difference if the price of a product is reduced within two weeks after the purchase is made.

That's what he calls a "Triad of Shopping Awesomeness."

Hidden discounts

Awesome deals can be found inside brick-and-mortar stores as well. Whether it is expressly stated or for those in the know, boutiques and big box stores alike are often willing to price match or offer a discount to reel in those that are ready to buy.

Circuit City and Sears not only have price matching policies, but they will undercut a lower advertised price by taking off an extra 10% of the difference. Plus, if customers catch a lower advertised price from another local store within 30 days of the purchase, the chains will refund 100% of the difference.

Even luxury retailers are willing to do what it takes to compete. A sales manager at Montmartre, a high-end clothier in New York City, said that even though it's not written in the store policy, they will match lower prices from other retailers on request and also give a 10% discount to their "VIP" customers, which include those that shop at the store regularly or have reached a certain spending threshold. Not a bad deal for a $400 dress or pair of $190 designer jeans.

In light of the current economic conditions, the store recently added more clients to the VIP list, the manager said, hoping to boost sales.

Haggling

Even outright haggling - once restricted to flea markets and car dealerships - has become acceptable in the mass retail marketplace.

Most store policies on bargaining are informal, but shoppers with the nerve to ask about flexible pricing may just save some serious cash.

A good place to start is to ask to speak with a manager. Often a sales associate will defer to the store manager, who has more leeway to cut deals. Open the discussion by asking if the listed price is the best possible deal.

Electronics retailer P.C. Richards is willing to negotiate on everything from air conditioners to HDTVs. With a little prodding, a sales manager agreed to take 10% off the retail price of a Garmin Nuvi 200W GPS System, which comes to about $30.

Slightly imperfect merchandise

There is more flexibility to haggle on products that have been on display and show some wear, such as shoes or sports equipment. A garment displayed on a mannequin or an item in a store window might come with a discount if it's missing original labels or packaging.

Electronics sold "out of the box" are also a source of great bargains, and usually have little more wear than a few fingerprints. Though they are generally missing instructions, these can often be easily downloaded online.

A manager at Best Buy said he would knock 10% off the price of a product if the box had been opened - even if it was in perfect working order.

At PC Richards, a manager slashed the price of the display model on a navigational system by 50% - not bad by bargain hunting standards.