Newspaper article

Klobuchar Bill Targets Oil Speculators as Gas Prices near $4 a Gallon

Newspaper article

Klobuchar Bill Targets Oil Speculators as Gas Prices near $4 a Gallon

Article excerpt

A nascent jobs recovery is starting to boost optimism among Americans, but persistently high gas prices could greatly dampen business growth in the coming months.

That's why politicians are stepping up their efforts to clamp down on oil speculators operating in commodity markets.

U.S. Sen. Amy Klobuchar, D-Minn., announced this week that she is co-sponsoring legislation to limit the activities of individual speculators.

Her colleague, Sen. Bernie Sanders, a Vermont independent, described the problem in a nutshell.

In a recent commentary, he wrote: "A decade ago, speculators controlled only about 30 percent of the oil futures market. Today, Wall Street speculators control nearly 80 percent of this market. Many of those buying and selling oil in the commodity markets will never use a drop of this oil. They are not airlines or trucking companies who will use the fuel in the future. The only function of the speculators in this process is to make as much money as they can, as quickly as they can."

Sanders and Klobuchar are among dozens of lawmakers who wrote to the Commodity Futures Trading Commission (CFTC) earlier this month to implore the body to use position limits to address excessive speculation.

Klobuchar said in a Thursday news release that she's carried her message of cracking down on speculators directly to CFTC Chairman Gary Gensler.

Leaning on commission

The politicians are leaning on the Trading Commission because there is a disconnect between the law of supply and demand and the price that consumers are paying at gas pumps.

In the letter to the Trading Commission, Sanders and his peers wrote that the supply of oil and gas is "higher today than it was three years ago, when the national average price for a gallon of gasoline was just $1.90." The Energy Information Administration reported Wednesday that the average price of regular gas this week was $3. …

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