Senators Question Weak Oil Speculation Rule

[Better Believe It]

Senators Question Weak Oil Speculation Rule
By Brad Johnson
October 18, 2011

The Commodity Futures Trading Commission (CFTC) is poised to vote on position limits for oil trading, but some senators are concerned that the rule will be too weak to diminish oil speculation. Sens. Bernie Sanders (I-VT) and Maria Cantwell (D-WA) both wrote letters to CFTC Commissioner Gary Gensler, asking him to take stronger steps to curb financial speculators like Goldman Sachs and Morgan Stanley. Sanders called the expected rule “simply unacceptable“:

Unfortunately, if recent reports in the media are correct, the final rule on position limits, as currently drafted, will do little or nothing to lower prices and it will not eliminate, prevent or diminish excessive speculation as required by the Dodd-Frank Act. At a time when the American people are experiencing extremely high oil and gas prices, this would be simply unacceptable.

Sanders also called on the CFTC to ban “speculative commodity index fund trading,” citing the new report by Better Markets that identifies commodity index funds as the “primary drivers of excessive speculation.”

Sen. Maria Cantwell’s (D-WA) letter to the CFTC goes into more detail about the ineffectiveness of the proposed rule. “I urge the Commission to drop the ‘conditional spot month position limit’ policy from the final ‘Position Limits for Derivatives’ rule and treat the physically-settled and economically equivalent cast-settled ‘look alike’ contracts equally,” she wrote.

http://thinkprogress.org/green/2011/10/18/346567/senators-question-weak-oil-speculation-rule/

[RUMMYisFROSTED]

1. If Cantwell is concerned, I'm worried. nt

[Marr]

2. Sounds like the political establishment wants a little PR fig leaf for the election season,

but doesn't actually want to touch commodities trading, which has played a central role in the last few bubbles. It's what drove up gas prices, and it's what caused that "food shortage" from a few years back. Commodities speculation like this used to be illegal. It was only made legal in recent years and immediately became a huge problem for everyone BUT Wall Street and their lickspittles in DC.