Oil Speculators to be Curbed?
The New York Times‘ Ed Andrews had an interesting story yesterday which appeared on the paper’s splash page and then quickly disappeared.
The story said that U.S. financial regulators—in particular the Commodity Futures Trading Commission—is considering limiting oil trading volume by “purely financial investors” and that it “already has adopted tougher information requirements aimed at identifying the role of hedge funds and traders who swap contracts outside of regulated exchanges like the New York Mercantile Exchange.”
This is interesting news for anyone who has wondered how oil shot up to $145 per barrel a year ago amid plummeting demand, and even why the price has returned to near $70 this year even as full oil tankers sit anchored off Malta, because all the on-shore tanks are full.
The answer appears to be “speculators,” which lots of folks (Paul Krugman not least among them) strain to inform us is not a synonym for “evil doers.”
I’ve yet to be convinced.
So I count it as good news that the regulators are at last, ya know, regulating a little. And doing so without waiting for permission from the well-bribed Congress, as Andrews notes:
In the case of oil and gas trading, regulators made it clear that they were willing to move, without waiting for Congress to act on Mr. Obama’s overhaul, invoking their existing powers.
Regulators “invoking their existing powers” (i.e. “doing their jobs”)? The temerity! The insolence!