Congress may hit dry hole over oil speculators

By Tom Doggett and Joanne Morrison - Analysis

WASHINGTON (Reuters) - U.S. lawmakers have introduced a spate of bills to rein in market speculators blamed for pushing up crude oil prices, but time is running out and the White House is far apart from Congress on the issue.

Also, some experts fear that the proposals could do more harm than good.

Hedge funds, pension fund managers and other speculators have become public enemy No. 1 for many U.S. consumers when they pull into the gasoline station and drain their wallets.

To appease their constituents, lawmakers have proposed a range of solutions. Of all the bills introduced, the legislation that could have the biggest impact and hurt speculators the most is the Senate's End Oil Speculation Act, which would increase the amount of money that some investors have to put up in order to buy and sell crude oil.

Democratic Sen. Byron Dorgan introduced legislation last week to raise the margins on speculators that trade oil futures to 25 percent of the value of the underlying commodity, sharply higher than the current margin of 5 to 7 percent.

Dorgan's bill may be part of anti-speculator legislation that Democratic leaders plan to unveil when lawmakers return from their July 4 holiday recess.

"My hope is that we will bring up a piece of legislation that will drive a spike in the heart of all this excess speculation and begin to put some downward pressure on gasoline and oil prices," Dorgan told Reuters in a telephone interview from his home state of North Dakota.

However, time is running out for getting any bill cleared through both the Senate and the House of Representatives that would also be agreed to by the White House.