* 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 (Reuters) - 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 meeting.
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 David Gregorio