WASHINGTON, D.C.— Cantrell Dumas, Director of Derivatives Policy, issued the following statement on Better Markets’ fact sheet on speculators in the energy commodities markets:
“This Memorial Day weekend marks the start of the summer driving season when many Americans will be hitting the road and dealing with the likelihood of increased gas prices. The higher costs at the pump can be attributed to various factors, but it appears that commodity speculators play a significant role. American families are negatively affected by excessive speculation in the oil and gas commodities markets because speculators make risky bets that often lead to unstable prices, causing the cost of oil to go up which drives up the price of gas.
“The CFTC’s most recent rulemaking on position limits did not find the right balance between the needs of producers and consumers—who are the main focus of these markets—and the role of speculators, high rollers who should remain confined within defined boundaries.
“Similar to a dealer at a casino when there is evidence of cheating, the CFTC should reshuffle and adjust its current position limits regulation if there is any evidence that the federal position limits are set too high in the energy commodities markets. Given the recent historic profits of the biggest energy commodities players, the CFTC has circumstantial evidence to conduct a thorough investigation into whether excessive speculations in the energy commodities markets were the driving force behind these profits.”
Read the Fact Sheet here.
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.