Washington, D.C. – U.S. Senator Amy Klobuchar today called on federal regulators to rein in excessive Wall Street oil speculation that is hurting consumers at the pump and increasing costs for farmers and businesses. During a meeting with U.S. Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler, Klobuchar called on the regulatory body to immediately implement long-stalled rules on speculative position limits in America’s oil and gasoline markets. Klobuchar also cosponsored legislation this week to 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.
“Out-of-control speculation on Wall Street is driving up gas prices, hurting consumers and increasing costs for farmers and businesses,” Klobuchar said.“We need the CFTC to do their job and enforce the fair rules of the market to help lower gas prices and give drivers some relief at the pump.”
Oil speculators now control over 85 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 Dodd-Frank Wall Street Reform Act mandated that the CFTC finalize position limits on energy commodities no later than January 17, 2011, but the CFTC has failed to do so. During the meeting, the senators called on the CFTC to take immediate action to enforce strong position limits.
The Anti-Excessive Speculation Act, cosponsored by Klobuchar, 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 serves on the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission.