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Washington, D.C. - Congressman Dale E. Kildee (D-MI) today voted to curb excessive speculative trading of energy futures that is driving up oil prices and increasing volatility in energy markets. H.R. 6604, the Commodity Markets Transparency and Accountability Act of 2008, would increase transparency, oversight, and anti-manipulation authority over futures and options markets. However, the measure failed today in the House predominantly along partisan lines.
As the price of regular gasoline in Michigan averages $3.83, Congressional Republicans are opposing legislation that would provide consumers much-needed relief. Additionally, President Bush has threatened to veto the measure.
“The Energy Information Agency testified that excessive speculation may be responsible for raising oil prices by $20 and by up to as much as $60 per barrel, yet the President is ignoring his own energy statistics agency in threatening a veto,” said Kildee. “This bill would have provided regulators the tools they need to be more vigilant of manipulation in energy markets.”
The Commodity Markets Transparency and Accountability Act would have:
- Closed the “London Loophole” by ensuring that foreign boards of trade adhere to the same rules as U.S. exchanges by requiring that offshore markets share trading data and adopt speculative position limits on contracts that trade U.S. commodities;
- Required the Commodity Futures Trading Commission (CFTC) to set trading limits for all agricultural and energy commodities, in order to prevent excessive speculation.
- Limited eligibility for hedge exemptions to bona-fide hedgers;
- Strengthened CFTC enforcement, requiring a minimum of 100 full-time employees to enforce manipulation and prevent fraud. Despite record trading volume in the futures and options markets, CFTC staffing is at its lowest level since its creation in 1974; and
- Authorized CFTC to impose limits on energy and gas over-the-counter markets, which involves trading between corporate entities rather than through an exchange.
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