Federal regulators are apparently considering limiting or ending the practice by oil traders of speculating and betting on the future price of crude oil.
According to a story posted at Bloomberg News Service this morning, "The Commodity Futures Trading Commission will hold hearings this month and next to explore the need for government-imposed restrictions on speculative trading in oil, gas and other energy markets, Chairman Gary Gensler said today in a statement."
The planned CFTC hearings are at least partly the result of public statements by Senators Bernie Sanders and Bart Stupak blaming speculators for last years rapid run-up of crude prices from $70 to nearly $150 a barrel, and their call for the CFTC to take action to prevent such occurrences in the future.
Sanders, an independent from Vermont, caucuses with the Democrats and is the only socialist in Congress. Stupak is a Michigan Democrat.
This is an idea whose time has come. Oil prices were bound to rise as the world became aware that the peak of global oil production is either imminent or already behind us, but wild oscillations in prices of the type we saw last year are purely the result of speculation, and they cause ordinary people to suffer unnecessarily.
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