Monday, August 11, 2008
Guest Comment: Stop Oil Speculation Now
To lower oil prices for all Americans, we need to increase domestic supply, exploration, alternative energy sources and conservation. We also must protect bona fide speculation and hedging. To address excessive speculation, Congress should promptly:
Re-establish strict position limits on energy commodities. Position limits have existed since 1936 and work well at curtailing excessive speculation. Any trader not hedging with the intention of taking physical delivery of a related commodity must be subject to strict position limits.
Close the London Loophole. Foreign Boards of Trade with U.S. Terminals trading futures contracts that cash-settle against U.S. contracts should face the same regulations as U.S. exchanges. It is not fair for U.S. futures exchanges to face more regulation than their foreign counterparts trading in U.S. commodities.
Regulate “swaps trades." All trades in the over-the-counter (OTC) swaps market must be subject to strict position limits. It is unfair to exempt swaps dealers from the same regulations that other market participants face. Experts have estimated the size of the OTC markets to be nine or ten times larger than the futures markets.
Fully close the “Enron loophole." “Exempt Commercial Markets” that trade U.S. contracts nearly identical to fully regulated contracts should not be exempt from the same regulations that apply to Designated Commercial Markets such as the NYMEX.
Bring transparency to all energy trading. Positions of traders in all markets should be reported to the Commodity Futures Trading Commission (CFTC) and should be categorized based on where the trades occur and who is doing the trading. This will provide vital information to detect and prevent market manipulation.
By adopting these common-sense solutions, Congress can dramatically reduce the price of oil and gas, providing immediate relief for businesses and hard working Americans.
-Stop Oil Speculation Now
Tuesday, 12 August 2008
Dateline USA....
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