Larson Ponders Curbs To Oil Market Speculation

U.S. Rep. John Larson wants to rewrite the rules of how oil is bought and sold, blaming investor speculation for record prices that have raised the cost of home heating oil.

Flanked by heating oil dealers from around Connecticut, Larson, D- East Hartford, said in Hartford Monday that he is trying to build support in Congress for legislation aimed at preventing investors from speculating on the price of crude oil. He is calling for increased regulation and rules that would allow only firms interested in owning oil – rather than speculating on its price – to participate in the oil futures market.


The proposal by Larson comes as the Northeast reaches the end of a winter where consumers paid record prices for heating oil. Dealers said their customers are paying $1,000 to fill up a typical tank, up from $250 just a couple years ago.

Larson and the dealers said record prices for oil on the New York Mercantile Exchange aren’t being driven by the supply and demand for gasoline, home heating oil and other products refined from crude. Instead hedge funds, investment banks and other funds are getting more involved in energy markets, buying future contracts to speculate prices will increase. That’s left the demand for future contacts- not oil – driving prices to record levels, they said.

Hartford Courant