Senate Pushes Ahead On Oil Trading Bill

(AP)  The Senate voted Tuesday to move ahead with a Democratic plan to curb speculation in oil markets that has been blamed for some of the recent run-up in oil prices.

The 94-0 vote clears a procedural hurdle for the legislation, which would require the Commodity Futures Trading Commission, or CFTC, to set limits on trading in oil markets by investors and speculators.

Despite the big tally, however, the rival parties are bitterly divided on how to address high gasoline prices and an underlying stalemate remains in place.

The rapid increases in oil prices have coincided with big rises in trading on oil future markets and investment in oil by pension and hedge funds. Democrats say much of the recent increases in oil prices are due to speculation and investment by people who have no intention of taking possession of the commodities.

"The demand for 'paper barrels' ... has begun to swamp the price signals that are generated by the more traditional hedgers and the large producers and the consumers of petroleum products in tune to the real time dynamics of supply and demand," said Energy Committee Chairman Jeff Bingaman, D-N.M.

Republicans said the bill would have little if any effect and said Congress should instead lift a ban on offshore drilling along the Atlantic and Pacific coasts and the eastern Gulf of Mexico.

They protested that Senate Majority Leader Harry Reid, D-Nev., appears determined to block a vote on allowing more offshore drilling, despite opinion polls that show voters increasingly support the idea.

"Nobody can say with a straight face that simply addressing speculation - a very narrow part of the problem - is a serious approach," said Minority Leader Mitch McConnell of Kentucky.

Given Democrats' refusal to permit a vote on more exploration, Republicans are likely to ultimately block the measure unless they are permitted to offer more amendments. The bickering promises to consume the Senate for several days.

The debate is being driven by more than record oil prices. Presidential politics and the looming elections for control of Congress are coloring lawmakers' every move.

To a remarkable degree, the energy debate has been dominated by the question of whether to open up more Outer Continental Shelf waters to oil exploration. Most Democrats, led by Reid and House Speaker Nancy Pelosi, D-Calif., oppose the idea.

But Democrats are on the defensive since voters - though not Democratic-friendly environmentalists - increasingly support more oil exploration. If the idea was allowed an up-or-down vote, enough Democrats would likely defect and side with most Republicans for it to pass.

Sen. John McCain of Arizona, the presumptive GOP presidential nominee, recently reversed his position to favor new offshore drilling leases, though he remains opposed to opening up the Arctic National Wildlife Refuge to oil companies.

For Republicans, the drilling question is one of the few issues where they have an edge with voters, and they're pressing it to the hilt. Even though new offshore leases wouldn't deliver oil to the marketplace for a decade or so, some Republicans say simply opening up new coastal areas to exploration would lower prices now.

"If we move to demonstrate that we are opening up America's energy resources, that would factor into future expectations of where supply and demand go," said Rep. Eric Cantor, R-Va. "Those future prices are directly related to spot prices."

[gopack443]

Hope they have the votes to override the bush veto that''s sure to come.

[petro49l]

The days of Saudi sludge are over. American Oil Companies need a new horizon. Central and South America possess the greatest reserve of petroleum in the world. Why not cut the expenses? Oil leases are cheap and available in the Western Hemisphere. The American People are not profitting by this war. Bin Laden only makes a mockery of this culture. Oil Companies should go where they are welcome.

[rgoodiel]

To those that think the proposed legislation will not have an effect on oil prices, just look how far oil has dropped since the legislation was first proposed. Oil is down another $4.00 just today. Normally, it would have gone up with a hurricane in the Gulf due to speculators "speculatin" that it may damage oil rigs and supply coming from the Gulf!!

You also have legislators "speculatin" that oil prices will tumble due to the possiblity of drilling offshore, even though they admit that oil won''t hit the market for quite some time. Now tell me speculators don''t have a major influence on oil prices!!

[forthepeopl1]

this say''''''''s it all. it''''''''s all about the wall street investors and mainly china,japan investor. the one''''''''s mr potatohead paulson sold them in his many years.

his head is on the chopping block and he is useing the americans tax payers to bail him out.
July 22 (Bloomberg) -- Treasury Secretary Henry Paulson, trying to persuade Congress to approve his rescue plan for Fannie Mae and Freddie Mac, said U.S. financial market stability is at stake and international investors are awaiting the outcome.

``This is about not only our housing markets, but it''''''''s about our capital markets more broadly,'''''''''''''''' Paulson said in an interview with Bloomberg Television today. ``This goes well beyond the two institutions -- Fannie and Freddie -- it has to do with investors in the United States and investors all over the world.''''''''''''''''

yep, we the people get f by whitehouse and congress again..thanks to americans not telling congress to get f on this idear. everyone should hold town by town rally,city by city rally,state by state rallys or completely stop working stop buying,stop them in their tracks.

come on america what will it take for you to stand up for your kids and grandkids futures..

[e-mail]



americans need to tell congress that the same investors that are putting americans on the streets, need to be told that it goes both ways, and americans are not going to bailout the same investors that started this whole thing in the first place

[daysrnumbrd]

This bill will die, as with all other attempts to close the Enron loophole.

There are just too many Grand Oil Pigs in Washington that have kept this and all other measures, that attempted to close the loophole, on the shelf. The common lie is that more drilling is the answer, when in all reality, (according to the experts testimony before Congress a couple of weeks ago), almost half of the increase in oil prices were due to UNREGULATED SPECULATIVE BUYING OF CONTRACTS ON ICE. Any oil extracted from the ground in America would simply be sold on the world market as with all other oil, thus we would see the oil coming out of U.S. soil and transported (much of it) to China or India. All the while, the various members of the GOP and other elites would be making more money hand-over-fist while the rest of America holds the bag!

But one wonders, since Clinton originally signed the bill that introduced the Enron loophole to this country (written by Phil Gramm of Texas)... either Clinton was stupid and didn''t read the bill, or he is definitely one of the benefactors of this new raping of America!

[petro49l]

Pickens and Gore are two Don Quixote''s railing at their own wind mills. The Saudis consider this the ultimate joke on America. Pickens during his younger years would prefer hydrogen fuel and Gore, the solar panel and electric car. Wind produced electricity is only an industrial project. Not even a hurricane could spin the machines enough to make energy for a large U.S. city.

[petro49l]

Investors provided funds to the Oil Companies by buying shares and corporate bonds. They only slightly raised the price for petroleum. The Saudis demand $150 for a barrel. Their price and insisting on war in the Middle East caused a dramatic increase in the price for gasoline.

[yongamerica]

Perhaps its time to recognize that energy concerns are as important as the US Postal system. Perhaps its time for the US to nationalize its oil, gas, and major alternative energy sources. At the very least the price of energy will not be supporting huge dividends to investors and will also stabilize market prices by prevent energy speculation and price manipulation ala Enron.

[ctla567]

I agree, we cannot drill ourselves out of this oil problem. We have to conserve even if gas is cheap or even if we find other fuel to burn.

[whitemale08]

If Bush vetoes it then that''s the last proof you need to show that he hate''s freeedom and would rather see America commuting y bicycle!