* Senators want quicker action on oil position limits
* Lawmakers want more on CFTC efforts to stop manipulation
By Tom Doggett
WASHINGTON, May 26 U.S. senators on Thursday
will press the chief futures market regulator to impose
position limits on some commodities, especially oil, to help
rein in speculation blamed for high crude and gasoline prices.
Gary Gensler, the chairman of the Commodity Futures Trading
Commission, disappointed lawmakers earlier this week when he
failed to move ahead on a plan to quickly limit the number of
contracts a market participant can control.
Although the agency is expected to push ahead with
so-called position limits as part of its mandate to step up and
expand policing of derivative markets under the biggest
financial reforms in generations, it has conceded that it will
miss a July deadline to impose the measures.
With nearly $4 a gallon gasoline prices threatening to
stall a U.S. economic recovery, however, a group of 17 U.S.
senators urged the CFTC two weeks ago to unveil its final plan
by May 23. The agency made an initial proposal for the rules
earlier this year, but has not set a vote to finalize them.
Gensler will meet on Capitol Hill with some of the 17
senators later on Thursday, when the lawmakers also plan to
discuss the CFTC's oil manipulation lawsuit filed this week
against two traders and a global trading house owned by
Norwegian billionaire John Fredriksen. [ID:nN25151262]
The lawmakers want to make sure the CFTC does not wait
three years to go after any manipulating firms or traders who
may be behind the current high energy prices, according to a
Senator Maria Cantwell, who will be in the meeting with
Gensler, said on Wednesday that the CFTC should use its
emergency authority to impose position limits.
"We don't have to wait one more day," she said. "They can
implement these rules today and help consumers save on high gas
Senators Bernie Sanders and Bill Nelson will also be in the
Gensler has said the commission will begin considering
several rulemakings in late summer and he wanted position
limits to be in that first batch.
A long-simmering debate over the role of speculators in
commodity markets has been revived this year as many prices
push toward their 2008 peaks. While critics say that investors
with no intention of holding real oil or metals or grains are
artificially driving up prices, many analysts argue that tight
market fundamentals fully explain the latest run-up in prices.
John Felmy, the chief economist for the American Petroleum
Institute, told reporters on Thursday that high oil prices
reflect tighter global supplies and strong demand, and
speculators should not be blamed.
(Reporting by Tom Doggett, editing by Jonathan Leff)