President Obama to Propose Limits on Oil Speculation

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President Obama is expected today to call for Congressional action to add teeth to the regulations governing oil market trading. The President’s main proposal is likely to propose that regulators be given the power to set margin requirements for traders.

Setting margin requirements has been in the purview of the exchange, which in the case of crude oil is the Nymex. While the federal government can jawbone, it currently has no role in setting the margin requirements either for commercial or speculative traders.

What are the chances that changing the margin requirements for speculative trades could get through Congress? Slim and none.

Paul Ausick

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