Fred Business News - "Speculation," a dirty word across
To underline his case, Rep. Bart Stupak, D-Mich., said speculators now control 71% of oil on the market. That means only 29% control the physical oil being traded, down from 61% eight years ago.
Stupak blamed loosely regulated trading markets with numerous loopholes for the ease that traders have to buy and sell crude.
As a result, Stupak introduced legislation with the support of two other Democratic Congressmen to close loopholes that allow oil to be traded electronically in unregulated oil markets. The bill would also regulate other methods that Stupak claims oil traders use to avoid federal oversight.
"We can eliminate a major avenue that traders use to avoid oversight," said Stupak at a press conference Friday. "It's time for Congress to close the Enron loophole and lower our gas and diesel prices by 50%."
Many in Congress have suggested that closing a provision in the Commodity Futures Modernization Act of 2000 that critics call the "Enron loophole," after the energy trading company whose bankruptcy was the centerpiece of the corporate scandals early this decade. The provision allows oil futures to be traded in markets outside of the jurisdiction of the Commodities Futures Trading Commission.
Stupak, the chair of a House Energy and Commerce subcommittee, has pledged to investigate regulation of speculation further in a hearing on Monday.
Congress is currently awash in nine different bills - including Friday's proposal - that attempt to limit the role of speculators. Several have bipartisan support, but only one was co-sponsored by a Republican.
Source; Cnn.com
About Fred: Fred is president of The I Team Organization. With a back ground in agriculture Fred has lead many successful business ventures.
