Jeff Bingaman United States Senator from New Mexico

WASHINGTON – U.S. Senator Jeff Bingaman today cosponsored legislation aimed at improving the ability of the primary federal regulator of the oil futures markets to collect the data it needs to fully understand what is driving the rapid increases in price of oil.

Bingaman has cited market speculation as one of the key reasons behind the recent spike in the price of oil. He has called for the Commodity Futures Trading Commission (CFTC), which has regulatory authority over the oil futures market, to step up its regulatory role. The legislation he introduced with Senators Richard Durbin, Harry Reid, Carl Levin, Byron Dorgan, and Dianne Feinstein, called the “Increasing Transparency and Accountability in Oil Prices Act of 2008” would do the following:

Increases CFTC Resources:

• Authorizes the CFTC to hire an additional 100 FTEs to detect, prevent, and punish price manipulation and excessive speculation, and expresses the Sense of the Senate for the need for an emergency supplemental request from the President for this funding.

Strengthens CFTC Access to Oil Market Data:

• Closes the “London loophole” by treating oil traders located in London as if they were trading in the U.S. for regulatory purposes, in order to stop traders from manipulating prices and speculating excessively by routing oil trades through foreign exchanges.

• Requires more detailed reporting to the CFTC for index funds and swap dealers who typically take long positions that might drive up the price of oil.

• Requests a GAO study of the existing international regulatory regime that should be preventing excessive speculation and manipulation of oil prices.

Improves CFTC Independence:

• Moves the CFTC Inspector General out of the CFTC Chairman’s office.

“Supply and demand alone does not account for the rapidly rising price of a barrel of oil, which continues to reach record highs. When it comes to oil trading, we need a more transparent system,” Bingaman said. “That is the goal of this legislation.”

The bill was referred to the Senate Agriculture Committee.