In an attempt to slow increasing fuel prices, a coalition of 18 transportation-related organizations, including the American Trucking Assns. (ATA), sent a letter last week to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Speaker of the House Nancy Pelosi and House Minority Leader John Boehner to urge Congress to take action towards a fairer commodities market.
“Leading energy experts across the country agree that recent, unprecedented jumps in crude oil prices are due, in large measure, to rampant speculation in the energy commodities markets,” the statement said. “Just last Friday, when oil spiked by $10 per barrel, speculators traded 22 barrels of “paper oil” for every single physical barrel of oil consumed. Sophisticated “paper” speculators who never intend to use the oil are driving up costs for consumers and making huge profits with little to no risk.
“This country needs a fair, transparent and balanced energy commodities market, not one that is skewed to benefit speculators and institutional investors,” the statement continued. “We urge immediate action, through either the Commodity Futures Trading Commission or Congress, to ensure meaningful reforms are put in place to restore market integrity. Although specific measures must be carefully drafted to avoid unintended consequences, priority steps include (1) fully closing all loopholes, including the “Enron Loophole” and “Swaps Loophole, ” that allow institutional investors to avoid limits on the size of their investments; (2) ensuring all energy traders, including those trading on foreign boards of trade, are subject to the limits imposed on U.S. exchanges; and (3) increasing margin requirements and imposing appropriate disclosure/financial requirements on institutional investors.”