“The Honorable Gary Gensler
Commodity Futures Trading Commission
Three Lafayette Centre Three Lafayette Centre
1155 21st Street, NW 1155 21st Street,
Washington, DC 20581
Dear Chairman Gensler, and Commissioners Chilton, Wetjen, Sommers, and O’Malia:
We are writing to urge you to immediately enact strong position limits to eliminate excessive oil speculation as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. As you know, the Dodd-Frank Act mandated that your agency promulgate and enforce such limits no later than January 17, 2011. We are disappointed that, more than a year later, the Commission has not fulfilled this important regulatory duty.
Congress determined that speculative position limits are an effective and critically important tool to address excessive speculation in America’s oil and gasoline markets. It is one of your primary duties–indeed, perhaps your most important–to ensure that the prices Americans pay for gasoline and heating oil are fair, and that the markets in which prices are discovered operate free from fraud, abuse, and manipulation. There has been a major debate over the last several years as to whether spikes in oil prices are caused entirely by the fundamentals of supply and demand or whether excessive speculation in the oil futures market is playing a major role. It is clear to us that debate has ended. Exxon Mobil, Goldman Sachs, the Saudi Arabian government, the American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, and even a report last year from the St. Louis Federal Reserve have all indicated that excessive oil speculation significantly increases oil and gasoline prices. According to a February 27, 2012 article in Forbes, excessive oil speculation “translates out into a premium for gasoline at the pump of $.56 a gallon” based on a recent report from Goldman Sachs. The facts bear this out. According to the Energy Information Administration, the supply of oil and gasoline is higher today than it was three years ago, when the national average price for a gallon of gasoline was just $1.90. And, while the national average price of gasoline is now over $3.70 a gallon, the demand for oil in the U.S. is at its lowest level since April of 1997. Nor is the global supply of oil at issue. According to the International Energy Agency, in the last quarter of 2011 the world oil supply rose by 1.3 million barrels per day while demand only increased by 0.7 million barrels per day. Yet, during this same period, the price of Texas light sweet crude rose by over 12%. Meanwhile, oil speculators now control over 80 percent of the energy futures market, a figure that has more than doubled over the past decade.
As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation as required by the Dodd-Frank Act. Although the CFTC has adopted initial position limits, they are not strong enough and not yet in force owing to industry opposition, delays in swaps oversight and data collection. This is simply unacceptable and must change…”
Hey, look that’s not fair. They’re all Democrats and an independent that signed off on that letter!
That’s why as proud American Republicans, we’re trying within all our power to overturn this job killing, anti-Christian, illegal immigrant, birth control, and socialist piece of legislation.
“Oh, say can you see by the stock ticker’s early light
What so proudly we hailed at the last quarter’s earnings?
Whose big bucks and tax cuts thru the contentious fight,
O’er the peasants we watched were so fruitlessly complaining?
And the deep pocket’s big share, the champagne bursting in air,
Gave proof through the returns that our wealth was still there….”
I’m sorry. I have to stop. I’m choking up…