CLASS / COURSE: Foreign Exchange
Energy Markets Not Manipulated, U.S. Regulator Says
Please answer the following questions related to the attached articles. Do not copy and paste, use your own English language, and work individually.
What is the action suggested by US senators to reduce oil prices?
Do you think that this action will be active? Explain.
Energy Markets Not Manipulated, U.S. Regulator Says (Update1)
By Tina Seeley
May 7 (Bloomberg) -- Energy markets aren't being manipulated and speculators aren't a ``major factor'' in record prices, the head of the U.S. Commodity Futures Trading Commission said.
``We have a high degree of confidence that people are not manipulating the market,'' Commission Chairman Walter Lukken said today at a Senate hearing.
Crude oil futures contracts today touched a record $123.80 a barrel on the New York Mercantile Exchange. It closed today at $123.57 a barrel, up more than double a year ago.
The commission regulates trading on Nymex and other commodity and options markets. Trading on the markets it regulates increased about 27 percent last year, Lukken said.
``We have not seen that speculators are a major factor in driving these prices,'' Lukken said at a Senate Appropriations subcommittee hearing. Market fundamentals ``largely support where prices are at today,'' he said.
Senator Dick Durbin, an Illinois Democrat, questioned Lukken about the effects of raising the margin requirements for oil trades.
Senator Byron Dorgan, a North Dakota Democrat, has voiced support for increasing the amount of money traders must have on hand to participate in oil markets, in an effort to dissuade speculators.
``There would be migration off exchanges,'' Lukken said of the idea. ``It would be a tax on a type of trader.'
To contact the reporter on this story: Tina Seeley in Washington at firstname.lastname@example.org.
Last Updated: May 7, 2008 15:43 EDT
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SUBJECTS / CATEGORIES:
3. Financial Management
4. Business Economics