Congress takes aim at oil speculators.... well, maybe.

[sinkingfeeling]

http://money.cnn.com/2008/06/17/news/economy/oil_trading/index.htm?cnn=yes

NEW YORK (CNNMoney.com) -- Fed up with soaring oil prices and a chorus of people blaming Wall Street speculators, Congress is considering a host of rules aimed at limiting the inflow of investor money into oil contracts.

But oil traders urge caution. While more disclosure is a good thing, they say making it harder for speculators to invest in oil futures could have the opposite effect intended, and send prices higher.

Proposals have included requiring foreign exchanges to provide more information about crude oil trades, limiting the number of contracts speculators are allowed to hold, increasing the amount of money speculators need to put up to buy an oil contract, and removing speculators from the market entirely and limiting trade to just producers and consumers.

Another trader agreed, especially when it comes to doing something such as raising margin requirements, the amount of money traders are required to put up to buy contracts.

"You're raising the cost of doing business for the people who need the futures market," Stephen Schork, publisher of the industry newsletter The Schork Report, told CNNMoney.com. "In the long run, it's bullish."

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"Raising the cost of doing business for the people who NEED the futures market"???? Can somebody explain why anybody needs the futures market. The article even refers to 'bets' and countering 'bets'. Why, if futture trading is such a needed function, isn't it expanded to the consumer level. I'll pay $45 for that jacket on Sept. 1, which you're trying to sell for $65 today.

[nomorenomore08]

1. Greedy bastards playing the victim again...

nt

[anigbrowl]

2. Yes, people do need the futures market

Say you're a trucking company, it's reasonable to want to hedge against future price swings in the cost of gas. These people are known as 'commercial speculators' and the market fulfills an important function for them. The problem is 'index speculators', who have no need or plans to take delivery of any oil and are just riding the market up with the sole intention of making a killing.

[ColbertWatcher]

3. WWJS?

Jesus wasn't against index speculators.