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Reply #1


Response to Demeter (Original post)

Fri Mar 23, 2012, 06:32 PM

1. US senators press for position limits in oil markets

THERE ARE SOME IN GOVERNMENT WHO STILL GET IT...DRIVING OUT SPECULATION IN OIL WILL DO MUCH TO INSURE DOMESTIC TRANQUILITY...

http://www.reuters.com/article/2012/03/21/usa-oil-limits-idUSL1E8ELNOC20120321

* Bill would require limits in oil markets

* Senators say market not reflecting supply/demand

* CFTC chairman doesn't understand urgency -Sanders

By Ayesha Rascoe

WASHINGTON, March 21 (Reuters) - Ramping up pressure on U.S. commodities regulators, a group of U.S. senators on Wednesday unveiled legislation aimed at lowering skyrocketing fuel prices by reining in excessive speculation in oil markets. The bill would require the Commodity Futures Trading Commission to use its emergency powers to impose position limits in oil futures markets within 14 days of the measure becoming law.

"The American people shouldn't be held hostage to Wall Street speculators," Senator Amy Klobuchar, one of the six senators backing the bill, said at a news conference.


The lawmakers said the recent spike in oil prices does not reflect supply and demand fundamentals. U.S. gasoline prices have jumped nearly 30 cents in the past month, pushing the average national price to $3.87 a gallon, according the Energy Information Administration. Soaring fuel costs have touched off a flurry of finger-pointing in Congress, with Republicans saying the Obama administration is not doing enough to promote domestic oil production and some Democrats blaming market speculators. The Commodity Futures Trading Commission has finalized position limits that would restrict the number of contracts a trader can hold in 28 commodities, including oil, but those limits have not been implemented.

GENSLER 'DOESN'T UNDERSTAND' Senator Bernie Sanders, an independent, blasted the commission for not moving more quickly on limits. "I think that Chairman (Gary) Gensler doesn't understand the urgency of the moment and the pain that millions of people are feeling right now at the gas pump," Sanders said. Sanders urged the White House to press Gensler to move forward on limits. He also said if the emergency powers bill became law and the CFTC did not meet the 14-day deadline, Gensler should not remain in his position. The legislation likely will face an uphill battle to get passed in the Republican-controlled House of Representatives. Other than Sanders, all the co-sponsors of the bill are Democrats. Position limits were part of the 2010 Dodd-Frank law that was designed to bring tough oversight to Wall Street, including limiting excessive speculation.

The futures regulator, straining with a huge workload drafting the new rules, has said it could implement limits for the spot month contracts by June but the regulator must first finish its definition of what is considered a swap before it can do so. The final limits for all contract months can only be set a few months after the agency has collected a year's worth of swaps data, a process that is expected to end in August. The financial industry sued the CFTC in December, arguing the agency overstepped its bounds by imposing a rule that was riddled with flaws and had the potential to irreparably harm their members and the public.

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Demeter Mar 2012 OP
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