US likely to put limits on oil futures trading

Tag : oil contracts

Proposals being debated this week in the Senate would bring pricesmore in line with demand, proponents say. Excluding the effect ofspeculation, oil would be around $80 a barrel, 38 per cent lowerthan yesterday's price, according to Jesus Reyes Heroles, the chiefexecutive officer of Petroleos Mexicanos. Critics say restrictionsmay interfere with the functioning of a $4 trillion annual marketfor crude oil.

"Americans are being taken advantage of not only by Opec[Organisation of Petroleum Exporting Countries] but by speculatorsright here in our own country," says Senator Ted Stevens, anAlaska Republican, referring to the Organisation of PetroleumExporting Countries. "Historically, this has not been a badproblem. Only recently has speculation reached these unsustainablelevels."

Investor control of contracts to buy crude oil in New York almostdoubled in April from five years earlier as prices climbed,according to the Commodity Futures Trading Commission. Increasedenergy costs have slowed the economy, reduced consumer buying powerand angered voters.