The House Committee on Agriculture met to discuss the Commodity Futures Trading Commission (CFTC) and its role in monitoring oil prices. Rep. Jeff Moran (R-Kan.) said that speculation is a component of high oil prices but that speculation is being used as a scapegoat and preventing Congress from addressing other important issues.
Walter Lukken, acting chairman of the CFTC, said that the CFTC launched an investigation in December 2007 to monitor the oil prices, realizing that enforcement and regulation is imperative to the industry. According to Lukken, the CFTC has found that the cost of oil properly reflects supply and demand, adding that the CFTC is unable to find evidence supporting claims that speculation is driving up prices at the pump. Lukken said he welcomes evidence showing why oil prices should be lower than they currently are.
Lukken also said that the CFTC is able to monitor a complex market despite being understaffed. He stated that the CFTC has asked for $27 million dollars in order to increase its staff to historical levels. Lukken told the committee that the CFTC has seen an 8,000 percent increase in activity and will be unable to sustain itself without additional employees.
Lukken expressed support for the Farm Bill, saying that the CFTC is working to comply with it and asking Congress to allow its implementation before revising it. Lukken also said he is confident that the Farm Bill has closed the “Enron Loophole,” a loophole that allows for exchanges made electronically to circumvent US regulation.
Supply and demand still a law
Walter Lukken, acting chairman of the CFTC, said that the CFTC launched an investigation in December 2007 to monitor the oil prices, realizing that enforcement and regulation is imperative to the industry. According to Lukken, the CFTC has found that the cost of oil properly reflects supply and demand, adding that the CFTC is unable to find evidence supporting claims that speculation is driving up prices at the pump. Lukken said he welcomes evidence showing why oil prices should be lower than they currently are.
Lukken also said that the CFTC is able to monitor a complex market despite being understaffed. He stated that the CFTC has asked for $27 million dollars in order to increase its staff to historical levels. Lukken told the committee that the CFTC has seen an 8,000 percent increase in activity and will be unable to sustain itself without additional employees.
Lukken expressed support for the Farm Bill, saying that the CFTC is working to comply with it and asking Congress to allow its implementation before revising it. Lukken also said he is confident that the Farm Bill has closed the “Enron Loophole,” a loophole that allows for exchanges made electronically to circumvent US regulation.