Senators Seek to Restrict Oil Futures Trading

Five senators sent a letter to the head of the Commodity Futures Trading Commission (CTFC) today, calling on him to restrict the trade of oil futures, citing rising gas prices as reason to limit investment.

Sens. Dianne FeinsteinDianne FeinsteinJudiciary Dems seek hearing on voting rights Intel leaders push controversial encryption draft Democrats block energy spending bill over Iran amendment MORE (D-Calif.), Maria CantwellMaria CantwellThis week: Congress on track to miss Puerto Rico deadline Week ahead: Senate looks to wrap up energy, water spending bill Senate, House face time crunch on energy bill MORE (D-Wash.), Ron WydenRon WydenFeds list schools that sought exemption from discrimination statute IRS: Annual unpaid tax liability was 8B Overnight Cybersecurity: Fight over feds' hacking powers moves to Congress MORE (D-Ore.), Ted Stevens (R-Alaska), and Olympia Snowe (R-Maine) called on CFTC Chairman Walter Lukken to use emergency powers to prevent futures traders from increasing the size of their investments, and to reduce the holdings of institutional investors, such as banks and investment funds, whose investments exceed certain levels.

The senators wrote that the increasing price of oil futures is driving up the price of gasoline. Futures trading centers on the purchase and sale of oil at future prices, and investors essentially bet on how the price of oil will fluctuate. Over 99 percent of new investors are betting that the price of oil will go up, the senators wrote, resulting in a speculation bubble that has driven up the price of oil.

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