The Senate passed new rules last week that would stop oil speculation on Wall Street as part of the Restoring American Financial Stability Act of 2010.
“The new regulations … if enacted, will limit the number of dark trades being made by adding transparency and oversight to the trading mechanism, ultimately adding stability to the price of crude oil,” said David A. Castelveter with the Coalition to Stop Oil Speculation Now, a multi-industry coalition of businesses, labor groups, associations and citizens united in support of responsible energy policies and prices.
“Previously established loopholes that facilitate this type of casino-style trading will be closed. That is good for all Americans because energy consumption will be done by consumers who use the product. Prices should stabilize and become more reasonable as a result.”
The legislation, introduced by Sen. Chris Dodd of Connecticut and Sen. Blanche Lincoln of Arkansas, would require the Commodity Futures Trading Commission to set limits on the number of contracts a single trader can hold in commodities including gasoline, according to Bloomberg.
The proposal was created in response to concerns that speculators contributed to oil prices rising to a record $147.27 a barrel in 2008, according to the financial news and information website.
The legislation will now go to conference committee where members of the House, which also passed its own version of financial reform legislation, and Senate will create a compromise bill that will need to be passed by both chambers before being sent to the president for his signature.
For more information on Stop Oil Speculation Now, visit www.stopoilspeculationnow.com.