Radically different views on how energy markets work and how best to regulate them were aired before the Commodity Futures Trading Commission yesterday (July 28), when the regulator held the first of three hearings to discuss tighter controls on commodity trading.
Leaders of futures exchanges such as CME Group claimed excessive speculation was not the cause of high energy prices and that further controls would not help. But representatives of oil users such as the air transport industry strongly disagreed and called for much tighter regulation of firms engaging in commodity markets purely for speculative reasons.
A second hearing is being held today, and a third is planned for August 5.
Gary Gensler, incoming CFTC chairman, began by talking of the impact of the oil price on ordinary Americans and said it was the CFTC’s “duty to protect the public from the undue burdens of excessive speculation”....