UPDATE 3-Speculators' role uncertain in oil prices - CFTC
(Adds traders exceeded position limits; paragraphs 7-10, 19-21 new)
By Tom Doggett and Charles Abbott
WASHINGTON, Sept 11 (Reuters) - The U.S. futures market regulator on Thursday said it could not determine whether speculators were to blame for the run-up in crude oil prices this year.
Many U.S. lawmakers blame speculators for the big increase in crude oil and other commodity prices, and are calling for legislation to rein in excessive speculation.
But in a much-anticipated report to Congress on the impact of speculators on the energy markets, the Commodity Futures Trading Commission said it was not able to "quantify the amount of speculative trading occurring in the futures markets."
In one of its key recommendations to increase transparency, CFTC said the agency needed to classify traders more accurately in its market reports. It recommended removing swap dealers from the commercial category and creating a new swap dealer classification for reporting purposes.
Based on information the CFTC requested from 32 market participants, the agency said the amount of commodity index trading was estimated at $200 billion as of June 30, of which $161 billion was tied to markets regulated by the CFTC.
Of the $161 billion, about 24 percent was held by index funds, 42 percent was held by institutional investors, 9 percent by sovereign wealth funds and about 25 percent by traders that were largely made up of retail investors.
"While there was an increase in the net notional value of commodity index business in crude oil futures, it appears to be due to an appreciation of the value of existing investments caused by the rise in crude oil prices and not the result of more money flowing into commodity index trading," the CFTC said. Continued...
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