Congress Turns on Speculators in Oil Bubble

Legislators push regulation in effort to slow gushing prices
By Kevin Spak,  Newser Staff
Posted May 15, 2008 7:22 PM CDT
Traders work the Crude Oil trading pit at the New York Mercantile Exchange Friday, May 9, 2008.   (AP Photo/David Karp)
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(Newser) – It’s not OPEC pulling oil prices to ever greater-heights—it’s speculators. That’s the theory behind the Consumer-First Energy Act, a bill sponsored by Senate Democrats aimed at clamping down on runaway oil futures trading. As stocks fall, investors are fleeing to commodities, especially oil. But even the US government might not have the power to rein in the market, BusinessWeek reports.

“We regulate the trading of onions much more closely than the trading of oil,” argues one consumer advocate. “Regulation will bring some discipline to this raw speculation.” Speculators could simply jump to less-regulated exchanges—if they're the problem at all, some note. “We do not think the energy crisis will be solved by finding and punishing the big, bad speculator,” wrote one Goldman Sachs analyst. (Read more oil price stories.)