The Senate Commerce Committee took aim at both Washington and New York during a hearing on Tuesday, blaming poor regulation by federal agencies and market manipulation by institutional investors for the recent sharp increases in oil prices.

The committee criticized investments in commodities futures, which they said drive a “bubble” in energy prices. Sen. Byron Dorgan (D-N.D.) called it “an orgy of speculation.” The senators also blamed deregulation, specifically the so-called “Enron loophole.”

“We expect federal oversight agencies to actively police the oil markets for fraud, manipulation and excessive speculation,” she said.

“I want us to be able to follow the money and see what’s driving this market bubble,” said Sen. Amy Klobuchar (D-Minn.), a former prosecutor. “We need a cop — and prosecutors — on the beat.”

Sen. David Vitter (R-La.), however, did not go as far as some of his colleagues. “I tend to think active illegality or active manipulation is a small part of the picture,” he said.

The witnesses at the hearing said that a quarter to a third of the price of oil may be due to a speculative bubble in the oil futures market, but saved their harshest words for federal commissions overseeing commodity futures.

Billionaire hedge fund manager George Soros said, “I find commodity index eerily reminiscent of a similar craze for portfolio insurance which led to the stock market crash of 1987. In both cases, the institutions are poling in on one side of the market, and they have sufficient weight to unbalance it.”

Michael Greenberger, a law professor at the University of Maryland and former head of the Commodities Futures Trading Commission, said the agency has “abdicated its authority” to less transparent and active regulators in London and Dubai.

“Just fire the commissioners and clean the problem out,” said Mark Cooper of the Consumer Federation of America, adding that the poor performance of federal regulators is the “regulatory equivalent to FEMA’s response to Hurricane Katrina.”