CFTC Position Limits on Oil Speculation Will Not Take Effect Until 2012, Agency Announces

[Klukie]

CFTC Position Limits on Oil Speculation Will Not Take Effect Until 2012, Agency Announces

Posted by Josh Garrett on January 18, 2011 at 4:48 pm



After more than a year of debate and uncertainty, the Commodity Futures Trading Commission (CFTC) has announced a clear time line for implementation of position limits on speculative investors in oil and other products. Reuters reported on Tuesday that the CFTC’s latest filing sets early 2012 as the goal for application of the position limits intended to reign in volatile prices for crude oil, heating oil, and other energy and metal commodities. The announcement follows a CFTC vote last week to move forward with the proposed position limits, and precedes the 60-day public comment period on the proposal, which will begin when it is published in the government’s Federal Register. The target date for implementation is almost exactly one year later than the deadline set by Congress in the Dodd-Frank financial reform bill that became law in July of last year.

But after declaring its legal authority to bypass the deadline set by the Dodd-Frank law and receiving numerous and repeated objections to the limits from investment banks and other major speculators, the CFTC is drawing out the implementation process considerably. The extra year to consider the proposed position limits will give the commission ample time to collect data on major speculators, gauge the sizes of their positions, determine how speculation affects prices, and determine how effective the proposed limits would be in reducing volatility. However, the rule proposal published by the CFTC specifies that it will not need to find a conclusive link between speculation and prices before enacting the new rules, in effect sidestepping the heated debate over whether or not excessive speculation drives up prices, as Reuters explains:

http://www.heatingoil.com/blog/cftc-position-limits-on-oil-speculation-will-not-take-effect-until-2012-agency-announces0118/

[NCarolinawoman]

1. That regulator that was on Ed last night--He hoped Obama would get on this soon.

He said it was suppose to have happened in January....and yes, this former regulator said that speculators most likely had a lot to do with the current upswing in the price of gas.

:mad:

[Andy823]

2. He also said

ALL the regulators had to vote on things, and it's obvious that the majority are not working for the people. I am not sure what the president can about this. He can voice his opinion, but can he really force them to do anything?