Sen. Bernard Sanders (Independent-Vt.), the feisty consumer
advocate, introduced a new bill this week to curb speculation in
The goal of the law is to reduce the price of oil and gas to
consumers, which he said has escalated in part due to
Sanders's bill would force the U.S. Commodities and Futures
Commission to take "certain actions to reduce excessive
speculation" and strengthen regulatory power.
Wall Street speculators who buy oil futures on mercantile and
commodities exchanges have been blamed for driving up the price
of oil in the U.S. and worldwide.
The Sanders bill would also give the commission two weeks
after the bill is enacted to enforce its new limitations.
Sanders maintains speculation adds to price increases. His
bill notes how crude oil inventories rose by 1.3 million barrels
without a resulting price drop.
Sanders also cited testimony by CFTC Chairman Gary Gensler
that as much as 87 percent of the oil futures market is dominated
Nomura Securities estimates "non-commercial 'investors'
currently have a $31.5 billion long position in the [oil
Crude oil futures jumped $1.69 to $107.04 a barrel in
afternoon trading on the New York Mercantile Exchange Friday, or
about 30 percent above the price in October. Gasoline futures
rose a nickel to $3.37 a gallon.
The national retail gasoline price average stayed flat Friday.
At $3.88, the price is a nickel higher than a week ago and 33
cents higher last year, the American Automotive Association
Sanders had criticized the CFTC for "moving much too slowly"
earlier this month.
CFTC Commissioner Bart Chilton said in a letter that he had
drafted regulatory language that would reel in speculation and
its effects on prices.
Clay Pederson, Chilton's special assistant, said last week
that the CFTC needed to collect more data.
Energy prices have been a political hot potato, with
Republicans using high oil and gasoline prices to discredit
President Barack Obama's administration.
Obama this week mounted a counter-offensive, including visits
to Cushing, Okla., the staging point of TransCanada's (
) southern Keystone XL Pipeline, a solar panel plant and other
Oil and natural gas industry advocates have used high energy
prices to urge the president to open more federal lands to
development and exploration. The American Petroleum Institute,
funded by the oil industry, contends doing so could help lower
global prices by adding to the nation's supply.
Nomura reports speculation started skyrocketing in March 2008,
reaching its peak near March 2011 - when speculators held a $40
billion interest in the market.