The recently enacted Wall Street reform legislation will stop rampant oil speculation if implemented properly by government regulators. This law should close loopholes, improve oversight and increase transparency in the oil markets. Government regulators must quickly put these reforms into action to prevent the continued manipulation of oil markets.

 Speculation Reform Victory

On July 21, 2010, President Obama signed into law the Restoring American Financial Stability Act of 2010. This legislation is a tremendous victory for consumers because it should once again allow supply and demand to determine the price of energy, not Wall Street speculators. This law will specifically address rampant speculation by:

• Establishing tough regulatory oversight of commodity markets
  
• Increasing transparency by requiring exchange trading and clearing of most energy contracts
  
•  Providing government agencies with the authority to regulate over-the-counter derivatives. This oversight will prevent big banks from manipulating and cornering commodity markets
  
• Closing known loopholes including the “Enron Loophole” and the “London Loophole”

What’s Next?

Government regulators at the Commodity Futures Trading Commission (CFTC) must adapt the new law into meaningful rules that stop rampant oil speculation. This means interpreting the complicated legislation in a way that does not create new loopholes while also reestablishing strict position limits on energy commodities.

The financial-reform act includes complicated provisions that could delay implementation – meaning it could be months before new rules take effect. These delays might allow Wall Street lobbyists to influence and shape the final rules. In addition, speculators will use this interim period to continue manipulating oil markets.

The S.O.S. Now Coalition will monitor the implementation process to ensure that new rules help you – not Wall Street. You can stay up-to-date on efforts to finalize speculation reform by following us on Facebook and Twitter. We have made huge strides in the fight against excessive speculation. Together, we can ensure that speculators never again manipulate energy prices.