TEXT OF INTERVIEW

Scott Jagow: Once upon time, when the price of oil dropped $7 in three days, it was a pretty big deal. Now, it's a regular occurrence. Despite this week's drop, oil is still trading above $133 a barrel this morning. The story right now seems to be whether the U.S. can impose new regulations on oil trading. For example, limiting the number of contracts big-time investors can buy at once. The idea is to get some of the speculation out of the market.

Stephen Beard joins us from London. Stephen, I understand, one thing U.S. regulators are working on is something called the London loophole?

Stephen Beard: Well, the American regulator, the CFTC, has just told Congress that it's going to attempt to impose its regulations on this contract traded in London. Because the feeling is that U.S.-based oil traders are evading the American regulations, dealing directly with London.

Jagow: But can a U.S. regulator regulate trading in Britain?

Beard: Well that's . . . that is the $64,000 question. The CFTC says they're going to push ahead with this, and this loophole could be closed down within three months. But the exchange here in London says yes, we'll accept these American regulations -- if the British regulator says it's OK. The British regulator is known to be very reluctant to do this. However, what it said this morning is we're going to consult with the market and make a decision.

Jagow: Well, I would imagine Britain and the U.S. share a common interest here, which is the price of oil.

Beard: Indeed. But the regulator here in London does not believe that it is speculative activity that is principally responsible for the rising price of oil. The regulator in the past has spoken on this subject, and has said we think there is a lot of hot money pouring into this market, but this is basically a matter of supply and demand.

Jagow: All right, Stephen Beard. Thank you.

Beard: OK, Scott.