Politicians Make a Move Against Oil Speculators

Posted by Patrick O'Connor on 6/27/08 9:27 am

The U.S. House of Representatives approved a bill yesterday that targets oil speculators. The bill passed by a 402-19 vote. If the measure passes the Senate and gets signed by the president, it would require the Commodity Futures Trading Commission to consider using limits on how much a speculator can trade in oil contracts and raise margin requirements.

U.S. News & World Report

6 Myths About Oil Speculators
By Rick Newman

So now we know who's really responsible for $4 gas. Finger-pointers from Washington, the International Monetary Fund, and even Saudi Arabia no longer seem to buy the idea that the demand for oil around the world is simply growing faster than the supply, driving prices to record highs close to $140 per barrel. There must be a more nefarious reason, it seems. So now entering this drama is a villain everybody can hate: The Evil Speculator.

At recent congressional hearings, politicians and energy experts argued that speculators have artificially added $30 or more to the cost of a barrel of oil, turned oil trading into a global poker game, and doubled the price of gasoline practically overnight.

But who are these party crashers? Where did they come from? How are they doing this? And who can stop them? We'd all like to see a superhero swoop in and smite the speculators, saving Gotham from the peril of $4 gas. The only problem is, speculators aren't quite the bogeymen that politicians want us to think--and they even play an important role in the oil markets and the global economy. Some major misconceptions: Read More.

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