Right on cue, Vermont Senator Bernie Sanders is calling for the CFTC to stop speculators from driving the price of oil through the roof (as if that's what happening). And the CFTC has his back.
Quoth Mr. Sanders to Reuters:
"Despite the record supply of oil and reduced demand, prices are going up, not down," he said.
Sanders blamed the spike in energy prices on market speculators.
"The last thing people need now is to be ripped off at the gas pump because speculators on Wall Street -- some of the same people who received the largest taxpayer bailout in U.S. history -- are allowed to jack up oil prices through price manipulation and outright fraud," he said.
Sanders' legislation directs the Commodity Futures Trading Commission, which oversees futures markets like the New York Mercantile Exchange, "to stop sudden or unreasonable fluctuations or unwarranted changes in prices."
The bill would also limit the number of oil and gasoline futures contracts that a bank holding company engaged in energy trading could control.
Hedge funds that trade in the energy market would also be subject to strict contract speculation limits and would have to register with the CFTC.
Sanders introduced his bill after he wrote to new CFTC chairman Gary Gensler two weeks ago, asking that the agency crack down on speculators.
CFTC Commissioner Bart Chilton is backing Sanders' call to action. "I wholeheartedly agree with you that the time to act on these issues is now, and the CFTC should aggressively utilize all available authorities...to address these pressing issues," Chilton wrote to Sanders.