On the day the oil price touches $80, ironically, a renewed push to dilute attempts to limit speculation

Isn't it ironic that on the day that newspapers are abuzz with the news that oil is already back to $80, we have the FT reporting that "US plans for an aggressive crackdown on energy speculation are in danger of unravelling, with leaders at the US commodity regulator raising doubts about proposed reforms"

Why is this? Principally because of - you've guessed it! - concerns that if the US introduces tough rules, then trading will simply move to other countries.

Democart-nominated CFTC commissioner Michael Dunn, who earlier said the CFTC should consider new speculative limits, is reported to now say: “When a contract trades globally, it may be detrimental to US markets for the CFTC to act unilaterally on position limits while other countries with benchmark contracts chart different courses”.

So, as I have argued consistently for several years, global markets have only two choices: either the current more or less unregualted market, or global rules applied consistently across all countries. Continuing with unregulated markets will bring back oil prices at $120 (and perhaps even $250 as some authorities predicted only a short while before the crisis). Putting in place global rules will limit boom-bust speculation and ensure that prices reflect, as they should, genuine demand. Sphere: Related Content