By Vicki Needham - 01/12/11 08:32 PM EST
The law directs that the speculation limits be set "to diminish, eliminate, or prevent excessive speculation," the letter said.
Speculation in commodity markets has contributed to the volatility and periodic price spikes of oil and basic food staples, the lawmakers argued. An example cited in a press release stated that an influx of speculative investment helped drive the price of oil to $145.31 in June 2008; it hit low of $30.28 just six months later.
In recent years, Nelson and Cantwell have offered several measures intended to prevent manipulation and reduce excessive speculation in commodity markets.
Nelson authored legislation to close the “Enron loophole,” which allowed energy derivative trading firms such as Enron to operate without transparency or regulatory oversight.
Cantwell proposed a bill to enable regulators to prevent and combat manipulation in commodity markets.