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WASHINGTON - Oil speculators are partly to blame for high gasoline prices and should be reined in, Rep. Tom Petri said Thursday. Petri said he plans to introduce a resolution in the House of Representatives calling for a U.S.-led international effort to lessen the impact of price speculation in oil markets.
"A lot of factors contribute to record-high oil prices, and experts tell us that one of the factors could well be excessive speculation by hedge funds and others in futures trading markets, driving up the price of oil above what would otherwise be necessary," said Petri. "I'm introducing a resolution calling on the American financial leadership to work with markets around the world to have greater transparency, and also to install margin requirements to cut back on excessive speculation."
"I don't think this can do any harm, and it could do a lot of good because it could squeeze the speculative price out of already too high-priced oil," he said.
Petri has distributed a "Dear Colleague" letter to other members of the House seeking their support.
"Specifically, my resolution is focused on the role that margin payments could play in discouraging speculative trading world wide," the letter states. "Margin requirements are minimal on regulated exchanges and are left entirely to the discretion of the managers of unregulated and regulated exchanges alike. Higher margin requirements would increase the cost of speculation and help restore an appropriate market function in much the same way that U.S. margin requirements have facilitated stability on stock markets."
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