In testimony before the U.S. Senate’s Committee on Homeland Security and Governmental Affairs last week, the U.S. Commodity Futures Trading Commission’s chief economist claimed that their analyses have not discovered price manipulation in the commodity’s markets, but at least one portfolio manager testified that speculators are using CFTC loopholes to avoid detection and regulation.

Michael W. Masters, managing member and portfolio manager at Masters Capital Management LLC in testimony before the committee blamed legal loopholes and the enormous investment clout of speculative funds for pressuring commodity prices well above supply-demand market fundamentals. However, Jeffrey Harris, CFTC’s chief economist, pointed out that his staff’s economic analysis indicates that broad-based manipulative forces are not driving the recent higher futures prices in commodities across-the-board.

Testifying last week before the U.S. Senate Committee on the Judiciary regarding the skyrocketing price of crude oil and petroleum products, top executives from major oil companies blamed U.S. government restrictions on domestic oil and gas exploration for higher petroleum-related commodity prices. They also placed blame for spiking prices on a weaker U.S. dollar, economically restrictive domestic government policies and growing global demand from emerging economies.

Lumped fairly closely as well, oil executives claimed that investment funds have taken refuge in the commodities markets while the U.S. equities market continues to resolve the subprime mortgage crisis.