* Senators want quicker action on oil position limits
* Lawmakers want more on CFTC efforts to stop manipulation
(adds comments from senators on meeting)
By Tom Doggett and Emily Stephenson
WASHINGTON, May 26 U.S. senators, hoping to
rein in high oil and gasoline prices, slammed the U.S. futures
market regulator on Thursday for not moving to crack down on
speculators in commodity markets.
Commodity Futures Trading Commission Chairman Gary Gensler
refused to spell out when the agency would act on a rule to
limit the number of contracts big players can hold in the
country's commodity markets.
"There is nothing that I heard from him which suggests any
sense of urgency about the need to protect consumers or in fact
to protect our economy," Senator Bernie Sanders told reporters
after he and five other senators met which Gensler.
Sanders, an Independent from Vermont, said the CFTC
violated the law when it failed to impose position limits on
energy and other commodities by January, as required under the
Dodd-Frank financial reform law.
"The chief regulator on oil speculation, in my view is
breaking the law," he said.
Senator Maria Cantwell, a Democrat from Washington state,
said the CFTC needed to act now to drive out the excessive
speculation in the market."
She said Gensler told the senators that speculators made up
about 80 percent of trading in the energy market, and the other
20 percent were legitimate hedgers trying to protect against
swings in prices or supply.
"What it tells us is there should be even more urgency to
act. It is imperative that the CFTC take an aggressive role and
protect consumers today," Cantwell said.
Although the agency is expected to push ahead with
so-called position limits as part of its mandate to step up and
expand policing of derivative markets under the biggest
financial reforms in generations, it has conceded that it will
miss a July deadline to impose the measures.
With nearly $4 a gallon gasoline prices hindering U.S.
economic recovery, a group of 17 U.S. senators urged the CFTC
two weeks ago to unveil its final plan by May 23. The agency
made an initial proposal for the rules earlier this year, but
has not set a vote to finalize them.
Gensler's meeting with the senators followed an oil
manipulation lawsuit filed by the agency this week against two
traders and a global trading house owned by Norwegian
billionaire John Fredriksen. [ID:nN25151262]
Sanders said he was concerned the CFTC may wait three years
to go after any manipulating firms or traders who may be behind
the current high energy prices.
Gensler has said the commission will begin considering
several rulemakings in late summer and he wanted position
limits to be in that first batch.
"It's time to get this rule done," Senator Amy Klobuchar, a
Democrat from Minnesota, told reporters as she left the
A long-simmering debate over the role of speculators in
commodity markets has been revived this year as many prices
push toward their 2008 peaks.
While critics say that investors with no intention of
holding real oil or metals or grains are artificially driving
up prices, many analysts argue that tight market fundamentals
fully explain the latest run-up in prices.
John Felmy, the chief economist for the American Petroleum
Institute, told reporters on Thursday that high oil prices
reflect tighter global supplies and strong demand, and
speculators should not be blamed.
(Reporting by Tom Doggett, editing by Jonathan Leff and