Washington, D.C. – U.S. Senator Amy Klobuchar today cosponsored legislation to crack down on excessive oil speculation that is driving up gas prices and damaging the economy. The bill would establish clear position limits on Wall Street oil speculators and cap energy speculation as a percentage of the overall market. A recent report shows that oil speculation raises gas prices an average 56 cents per gallon, hurting consumers at the pump and increasing costs for farmers and businesses. Earlier this month, Klobuchar wrote a letter to the Commodity Futures Trading Commission (CFTC) pressing the agency to expedite long-stalled rules on speculative position limits in America’s oil and gasoline markets. Klobuchar serves on the U.S. Senate Agriculture Committee that oversees the Commodity Futures Trading Commission.
“Out-of-control speculation on Wall Street is driving up gas prices, hurting consumers and increasing costs for farmers and businesses,” Klobuchar said.“This legislation will help reign in this excessive speculation and give drivers some relief at the pump.”
Oil speculators now control over 80 percent of the energy futures market, a figure that has more than doubled over the past decade. Studies have shown that excessive trading in oil futures is causing price volatility unrelated to supply-and-demand fundamentals and contributing to high gas prices that are hurting consumers at the pump.
The Anti-Excessive Speculation Act would drain excessive speculation from the energy markets through three major steps. First, it would, for the first time, define what constitutes excessive speculation. The lack of a clear definition of excessive speculation is a major reason why past regulatory and legislative efforts have failed. Second, the bill would establish clear, precise statutory position limits on individual speculators. No single trader could hold more than 5 percent of the oil market for speculative purposes. Third, it would cap energy speculation as a percentage of the overall market. The cap would be set at its 25-year historic average.
Klobuchar has fought to increase energy efficiency in vehicles and buildings to reduce energy bills and save consumers money. She was part of a bipartisan group of senators that worked to reach a compromise and pass the 2007 Energy Bill which included a series of incentives for the development of new, more efficient consumer technologies, including increasing gas mileage for cars.