[TheDude]

Oh. My. God.

Yeah, let's take some liquidity out of the markets. Brilliant. Be amusing if this wound up causing shortages.

Of course, there's plenty of oil floating around:

$this->bbcode_second_pass_quote('', '"')A major contributor [to high oil prices] is the rise in speculation," said Sen. Carl Levin, D-Mich, who estimated that speculation has added about $35 to a barrel of oil. "This is not a supply and demand issue."

[JohnDenver]

I applaud Sen. Levin for getting the ball rolling. Yes, high oil prices are a good thing, but hoarding and excess speculation are counterproductive and need to be brought to heel.

This will no doubt be just the opening salvo. Here's some more ammo:

1) Forcing speculators to take delivery. You want to speculate on oil? Congratulations, you get to hold the product.

2) Very onerous/detailed/time-consuming reporting requirements for all oil-related transactions. Let's get a periscope up everybody's ass, and see where all the money is going. Last time I checked, you have to fill out a form for any cash transaction over $10,000. So let's apply the same sort of micro-regulation to the speculation clowns.

3) Continuing from 2)... Slap massive taxes on profits from commodities trades. 95% should be a good figure to start with. Make the taxes retrogressive.

4) Prohibit banks from lending to hedge funds to finance commodity speculation. (That idea worked well last time, in the 80s.)

5) Launch a hardnosed investigation into speculative manipulation of futures markets through OTC contracts/swaps, and other slimey borderline-criminal techniques which allow speculators to avoid CFTC scrutiny by posing as commercial hedgers.

6) Announce rationing and other demand-side measures.

[Cashmere]

$this->bbcode_second_pass_quote('threadbare', 'I') absolutely believe in peak oil and think that a price in the mid eighties reflects that. Further, I think even if the price rises no further, the entire social focus will shift towards alternatives, because 4.00 per gal gasoline, is onerous for many.

[FreddyH]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('joeltrout', 'A')re "Americans" the only ones speculating on oil? I don't think so.

joeltrout

[Armageddon]

--ANWR would be coming on line with 2 million barrels of oil per day of new domestic oil production for the US if Clinton hadn't vetoed Congressional bills allowing oil development there.

--bin Laden would've been taken out and 9/11 never would've happened if Clinton hadn't blocked the CIA from terminating him with extreme prejudice when a team on the ground spotted bin Laden and requested authorization to kill bin Laden in 1998.

================================

LOL, good one. When are you going to realize 911 was directly related to PO ? The government did everything but announce it on FOX news that a Pearl Harbor event was needed for a justification to invade oil producing countries and have more military presence in the middle east. Read the PNAC. It outlines their motives.

[eastbay]

If I can't invest in oil contracts overseas I'll simply invest here. I don't see this dampening oil prices one bit. The only way to reduce oil prices is to destroy demand or increase supply. Supply is only going down... particularly supply available for export, which, regarding oil availability and price, is primarily what most of the world cares about at this time anyhow. Demand appears to be raging along strongly too.

Furthermore, at (almost) $4.00/gallon, I don't see demand shrinking one bit around here. In fact, I bet the LA freeways, for example, are more jammed with cars at 5pm today than they were five years ago at the same time of day. And next year they'll still be just as jammed with cars with gas at $5.00 or $6.00/gallon.

We'll all be watching this, of course, but my prediction is that schemes and gimmicks such as this recent silly idea coming from Congress will have no effect on oil prices. Unless something truly draconian is passed by Congress, traders will find a way to invest. It's all pretty basic. Supply is shrinking and demand is growing, therefore prices will continue to climb.

[JohnDenver]

$this->bbcode_second_pass_quote('Jack', 'L')et's see now...who really controls the oil?

KSA? Mexico? Venezuela? Russian Federation? ExxonMobile? Or some mere hedge funds and speculators?

Are we saying that KSA, with all its oil, all its resources, is less of a factor than some group of hedge fund operators? I find that difficult to believe.

[JohnDenver]

$this->bbcode_second_pass_quote('eastbay', 'W')e'll all be watching this, of course, but my prediction is that schemes and gimmicks such as this recent silly idea coming from Congress will have no effect on oil prices. Unless something truly draconian is passed by Congress, traders will find a way to invest.

[smallpoxgirl]

$this->bbcode_second_pass_quote('eastbay', 'I')f I can't invest in oil contracts overseas I'll simply invest here.

[eastbay]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('eastbay', 'I')f I can't invest in oil contracts overseas I'll simply invest here.

[Jack]

$this->bbcode_second_pass_quote('JohnDenver', 'Y')ou don't understand how the world oil market functions.

[vaseline2008]

Threadbear has it right...

$this->bbcode_second_pass_quote('', 'L')evin said the solution can be found in closing the loopholes that allow electronic traders to buy oil outside of the United States. Levin noted that the "Enron loophole" will be ended if President Bush signs legislation that Congress passed as part of the proposed Farm Bill.

The "Enron loophole" was codified in the Commodity Futures Modernization Act of 2000, allowing oil futures to be traded electronically in unregulated markets outside of the jurisdiction of the Commodities Futures Trading Commission.

[Micki]

Stopping Americans trading oil overseas would just be another curb on the small people.
It wouldn't stop the big players. They all have overseas entities that they could use for this.
In fact you can probably see an exodus of funds and financial institutes as soon as something like this is put in place.

[threadbear]

$this->bbcode_second_pass_quote('Cashmere', '')$this->bbcode_second_pass_quote('threadbare', 'I') absolutely believe in peak oil and think that a price in the mid eighties reflects that. Further, I think even if the price rises no further, the entire social focus will shift towards alternatives, because 4.00 per gal gasoline, is onerous for many.

[threadbear]

$this->bbcode_second_pass_quote('Micki', 'S')topping Americans trading oil overseas would just be another curb on the small people.
It wouldn't stop the big players. They all have overseas entities that they could use for this.
In fact you can probably see an exodus of funds and financial institutes as soon as something like this is put in place.

[threadbear]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('eastbay', 'I')f I can't invest in oil contracts overseas I'll simply invest here.

[Micki]

$this->bbcode_second_pass_quote('', 'W')hy wouldn't stop the big players?

[threadbear]

$this->bbcode_second_pass_quote('Micki', '')$this->bbcode_second_pass_quote('', 'W')hy wouldn't stop the big players?

[JohnDenver]

$this->bbcode_second_pass_quote('vaseline2008', 'B')y the way JohnDenver, you are off about only 300,000 "open interest". The exact number is "302673" for only June 2008 contracts.

[JohnDenver]

$this->bbcode_second_pass_quote('threadbear', 'S')o you think a govt who will check the heels of my shoes at the airport, can pick through the minutia about my tax situation, can surveil me picking my nose from a satellite several miles up in the sky, should they choose, can't develop IT systems and reregulate to prevent a leviathon like Sachs from breaking the law, by trying to do an end run around it?