U.S. oil consumption is expected to go down by one million barrels a day compared to last year. Meanwhile, the supply of oil in the U.S. is higher today than it was 37 years ago. The fundamentals of supply and demand do not explain why gas prices have gone up 44 days in a row and why oil prices have more than doubled in the past four months. Sen. Bernie Sanders blames speculators for gaming world energy markets. On Wednesday he introduced legislation to make federal regulators invoke emergency powers to stop speculation.

“The last thing people need now is to be ripped off at the gas pump because speculators on Wall Street -- some of the same people who received the largest taxpayer bailout in U.S. history -- are allowed to jack up oil prices through price manipulation and outright fraud,” Sanders said. “Unfortunately, I am afraid that is exactly what is happening right now.”

Sanders’ legislation would direct the Commodity Futures Trading Commission to stop sudden or unreasonable fluctuations or unwarranted changes in prices.  It would subject bank holding companies engaged in energy futures trading to strict position limits, and require hedge funds trading in energy markets to register with the CFTC and make them subject to strict speculation limits. 

Sanders introduced the bill after meeting last week with Gary Gensler, the new commission chairman. In a May 28 letter, Sanders formally urged Gensler to “seize this opportunity to redefine the CFTC as a strong regulator that will do everything within its power to benefit consumers.”

Commissioner Bart Chilton yesterday endorsed Sanders’ proposal. “I wholeheartedly agree with you that the time to act on these issues is now, and the CFTC should aggressively utilize all available authorities…to address these pressing issues,” Chilton wrote to Sanders.

The House of Representatives last July passed legislation similar to Sanders’ bill by an overwhelming vote of 402 to 19.

For a copy of Sanders’ bill, click here.

For a copy of Commissioner Chilton’s letter, click here.