The announcement of deeper investigations into the manipulation of oil markets raises more questions than it answers.

Recent testimony on Capitol Hill suggests that in addition to fundamental factors, bets placed by institutional investors are partly to blame for record fuel costs. Meanwhile, executives from Big Oil companies like Exxon Mobil (XOM), Chevron (CVX) and Conoco Phillips (COP) contend constrained supply and increased demand are the culprits.

The Wall Street Journal reports the Commodity and Futures Trading Commission (CFTC) isn't just examining the effects of pension funds and other large investors on commodity markets. Several ongoing investigations are exploring whether traders exploited nuance in the disjointed crude markets to illegally take profits.

In a statement, the CFTC tried to assuage concerns it's failed to properly monitor the oil markets: "It's important that people who are paying high gas prices understand the CFTC is on the case."

Oil prices peaked last week at above $135 per barrel, pushing gasoline to nearly $4 a gallon. After almost doubling in the past 12 months, persistently high crude prices have finally garnered real attention from Congress. Washington is considering imposing restrictions on crude traders, limiting their ability to speculate.
 

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Fresh off a series of ineffective mortgage bailouts, regulators and bureaucrats alike are clamoring to demonstrate their aptitude for -- and commitment to -- consumer protection ahead of November's election. That the CFTC is just now getting around to keeping tabs on oil traders points to the ongoing inability of regulators to police the very markets they're charged with monitoring.

The Securities and Exchange Commission and the Federal Reserve ignored the mortgage business while it spiraled into a speculative bubble. Failure to enforce their own rules is one of the primary factors that contributed to the current crisis: billions of dollars have been lost, millions of homeowners are losing their homes and property values are in a free-fall with no signs of stabilization.

Now, only after high gas prices have started to seriously threaten the broader economy, are regulators bothering to take action.

If the CFTC follows the pattern of the SEC and the Fed, their efforts to protect consumers from financial markets gone mad will come too little, too late.