Senate considers oil speculation bill
Gas prices over $4 per gallon are displayed at a Shell station in San Mateo, Calif., on March 13, 2008.
TEXT OF STORY
Stacey Vanek-Smith: Last week, the price of crude saw its biggest one-week slide on record. Of course, today the price of oil's back up more than $1.70 a barrel.
There's been a lot of talk about why oil prices have risen so much lately and one popular culprit is speculation. The Senate's expected to vote on a bill to limit that speculation this week.
From the Marketplace Sustainability Desk, Sam Eaton reports.
Sam Eaton: Supporters of the bill blame energy market speculators for as much as 30 percent of the recent run-up in oil prices.
They hope to bring those prices down by broadening federal authority over futures markets and providing much needed funds to regulators, but Wall Street lobbyists say the bill's blanket approach to curbing speculation would unfairly punish those who don't abuse the system.
Greg Zerzan is with the International Swaps and Derivatives Association.
Greg Zerzan: Investors like retirees would be prevented from getting access to the one asset class -- commodities -- that's been holding up relatively well in the recent market.
Zerzan says even a farmer trying to hedge the cost of fertilizer through natural gas futures would be considered a speculator under the deal. Consumers could also feel the pinch. Zerzan says just about every industry, from airlines to manufacturing, use futures contracts to hedge their energy costs as a form of insurance. Take that away, he says, and the price of that cross-country plane ticket could go even higher.
I'm Sam Eaton for Marketplace.