LONDON, July 03, 2008 (Dow Jones Newswires)
U.K. lawmakers will probe the regulation of the oil markets in mid-July, as oil prices cycle ever higher and their U.S. counterparts pressure the market watchdog there to clamp down on excessive market speculation.
In a statement, the Treasury Committee, which monitors the U.K.'s Financial Services Authority among other bodies on behalf of members of parliament, said it will hear evidence on oil market regulation. It gave no further details.
Oil prices in New York early Thursday leapt to a fresh record high of $145.85 a barrel, despite assurances of extra crude from Saudi Arabia this month.
Speculators with little interest in taking ownership of physical barrels of crude have fast become the bogeymen for some politicians and ministers in oil-producer group the Organization of Petroleum Exporting Countries, who believe their actions explain why oil prices have thrust ever higher.
The U.S. House of Representatives voted Thursday to order the nation's energy market regulator to use its emergency powers to immediately curb excessive energy market speculation.
The 402-19 vote was in favor of a bill that calls on the Commodity Futures Trading Commission to more aggressively police the energy markets it oversees. It isn't clear that the bill will make it into law.
Trades by hedge funds and other non-commercial traders, along with swaps dealers who are trading on behalf of both financial investors and commodity companies, account for an estimated 70% of trading in U.S. markets, up from about 57% three years ago, according to the CFTC.
Lawmakers point to this data as evidence the speculators account for about 70% of the markets, a number the CFTC has indicated may be inflated.
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