Federal regulators proposed a rule Thursday that would place limits on large-scale oil traders, potentially reducing the volatility of the oil market.
Sen. Bernie Sanders, I-Vt., who has been a vocal critic of oil speculators, praised the proposed trading limits set by the Commodities Futures Trading Commission -- but not the timing.
"While I commend the commission for coming up with reasonable limits on excessive oil speculation, I am very disappointed that this proposal, as currently written, will not go into effect until March of 2011," said Sanders, who testified before the Commodity Futures Trading Commission in July about the effect of speculators on the marketplace.
The proposed trading limits will remain in effect for one year, making the effects short-lived, according to Sanders' office. During the 90-day comment period, which is now under way, Sanders will push to have the rule take effect sooner and remain in place.
As a rural state, Vermont is more affected than most by the price of oil. The bulk of Vermonters use No. 2 heating oil to heat their homes, and the state's lack of public transportation leads to drivers traveling many miles and using more gas.
In his closing remarks Thursday, the commission's chairman, Gary Gensler, said: "Our duty is to protect both market participants and the American public from fraud, manipulation and other abuses. Central to these responsibilities is our duty to protect the public from the undue burdens of excessive speculation that may arise, including those from concentration in the marketplace."
The Commodities Futures Trading Commission was directed in its original 1936 statute to set position limits to protect against "the burdens of excessive speculation, including those caused by large concentrated positions," Gensler said.
"We need to stop Wall Street from jacking up oil prices and we need to do it now," Sanders said. "My constituents are already paying too much for heating oil to stay warm this winter. Under this proposal, speculators will be able to artificially increase gasoline prices through the summer driving season and into next winter. That is wrong."