Excellent making progress ~ Reid, Dorgan introduce oil speculation bill
The Stop Excessive Energy Speculation Act of 2008
By Laura Mandaro
Last update: 3:28 p.m. EDT July 16, 2008Comments: 6
SAN FRANCISCO (MarketWatch) --
A group of Democratic senators said Wednesday they had introduced a bill targeting speculation in oil markets. Among other measures, it would require the U.S. futures regulator to allow only those companies that buy or produce petroleum to be considered legitimate hedgers, a distinction that could cut into the ability of large investment banks to use exchange-traded futures to offset swaps with financial investors such as pension funds. The Stop Excessive Energy Speculation Act of 2008, introduced late Tuesday by Sen. Majority Leader Harry Reid, D-Nevada, Sen. Charles Schumer, D-N.Y., Sen. Byron Dorgan, D-N.D., and Sen. Patty Murray, D-Wash., would also give the Commodities Futures Trading Commission more resources and authority to demand data from large traders. Reid, speaking from the floor of the U.S. Senate, said he had spoken to UAL Corp. CEO Glenn Tilton several times about the need for such changes. On July 15, 2008, Senators Reid, Durbin, Schumer, Dorgan, and Murray introduced S. 3268, the Stop Excessive Energy Speculation Act of 2008. This legislation, developed after consultation with consumer advocates, oil market analysts, and experts from the financial and airline industries, seeks to reduce the amount of excessive speculation in the oil markets. Specifically, the legislation would increase the resources and authority needed by the Commodities Futures Trading Commission (CFTC) to detect, prevent, and punish price manipulation and excessive speculation and give the CFTC emergency authority needed to rapidly implement the legislation. S. 3268 would also strengthen the amount and quality of information available to the CFTC so that the Commission can better regulate all aspects of the energy futures markets. In addition, the Stop Excessive Energy Speculation Act of 2008 would provide better transparency in the trading of energy derivatives by closing the "London Loophole" so that oil traders using a foreign exchange cannot manipulate the price of oil in the United States. Finally, the legislation would require the CFTC to implement position limits to restrict excessive speculation that would still allow for reasonable trading for price discovery, liquidity, and legitimate hedging purposes.
The Stop Excessive Energy Speculation Act of 2008
By Laura Mandaro
Last update: 3:28 p.m. EDT July 16, 2008Comments: 6
SAN FRANCISCO (MarketWatch) --
A group of Democratic senators said Wednesday they had introduced a bill targeting speculation in oil markets. Among other measures, it would require the U.S. futures regulator to allow only those companies that buy or produce petroleum to be considered legitimate hedgers, a distinction that could cut into the ability of large investment banks to use exchange-traded futures to offset swaps with financial investors such as pension funds. The Stop Excessive Energy Speculation Act of 2008, introduced late Tuesday by Sen. Majority Leader Harry Reid, D-Nevada, Sen. Charles Schumer, D-N.Y., Sen. Byron Dorgan, D-N.D., and Sen. Patty Murray, D-Wash., would also give the Commodities Futures Trading Commission more resources and authority to demand data from large traders. Reid, speaking from the floor of the U.S. Senate, said he had spoken to UAL Corp. CEO Glenn Tilton several times about the need for such changes. On July 15, 2008, Senators Reid, Durbin, Schumer, Dorgan, and Murray introduced S. 3268, the Stop Excessive Energy Speculation Act of 2008. This legislation, developed after consultation with consumer advocates, oil market analysts, and experts from the financial and airline industries, seeks to reduce the amount of excessive speculation in the oil markets. Specifically, the legislation would increase the resources and authority needed by the Commodities Futures Trading Commission (CFTC) to detect, prevent, and punish price manipulation and excessive speculation and give the CFTC emergency authority needed to rapidly implement the legislation. S. 3268 would also strengthen the amount and quality of information available to the CFTC so that the Commission can better regulate all aspects of the energy futures markets. In addition, the Stop Excessive Energy Speculation Act of 2008 would provide better transparency in the trading of energy derivatives by closing the "London Loophole" so that oil traders using a foreign exchange cannot manipulate the price of oil in the United States. Finally, the legislation would require the CFTC to implement position limits to restrict excessive speculation that would still allow for reasonable trading for price discovery, liquidity, and legitimate hedging purposes.
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