This is the most moronic idea ever.
All the solutions on that website are impossible. Oil is a global commodity. If you regulate the US futures market, people will just trade it in another market.
Re-establish strict position limits on energy commodities – Position limits have existed since 1936 and work well at curtailing excessive speculation. Any trader not hedging with the intention of taking physical delivery of a commodity must be subject to strict position limits.
1. How do you know what someone's intentions are?
2. Plenty of people are exposed to oil price fluctuation, but don't want West Texas Intermediate crude oil delivered at Cushing, Oklahoma. Take any airline for examle, they are exposed to oil prices and would like to buy futures to hedge that risk. But they actually want Jet-A, not crude oil. And they sure don't want to go to Cushing, OK to get it.
3. There already are position limits. No one is cornerning the market, so within that limit it doesn't matter how much someone buys.
Close the London Loophole – Foreign Boards of Trade with U.S. Terminals trading futures contracts that cash-settle against U.S. contracts should face the same regulations as U.S. exchanges. It is not fair for U.S. futures exchanges to face more regulation than their foreign counterparts trading in U.S. commodities.
1. They can just close their US terminals -> not good for the US.
2. Exchanges could create another contract that settles at a point just outside the US.
Regulate “swaps trades” – All trades in the over-the-counter (OTC) swaps market must be subject to strict position limits. It is unfair to exempt swaps dealers from the same regulations that other market participants face. Experts have estimated the size of the OTC markets to be nine or ten times larger than the futures markets.
1. If I agree to sell you oil for delivery in September. That is a forward/swap contract. You want to regulate that? You'll be regulating all sorts of commerce. People sign contracts all the time that amount to a swap contract. What if I own a small oil well and agree to sell the production for a fixed price to a refinery? That's a swap. Bam! You're a regulated commodities trader. Where's your license?
2. Also impossible. There's no single source for all the swaps in existance. If you enter into a swap with a bank in another country, they're not subject to US regulations. Also, you can enter into a set of two swaps that equals out to nothing. So...is that two swaps that I own...or two?
Fully close the “Enron loophole” – “Exempt Commercial Markets” that trade U.S. contracts nearly identical to fully regulated contracts should not be exempt from the same regulations that apply to Designated Commercial Markets such as the NYMEX.
An "exempt commercial market" is basially a glorified bulletin board. Two people are trading with each other, without the exchange as an intermediary. The "market" is just a place people go to find other counterparties. If I sell you oil on Craig's List, do you want that regulated?
Bring transparency to all energy trading – Positions of traders in all markets should be reported to the Commodity Futures Trading Commission (CFTC) and should be categorized based on where the trades occur and who is doing the trading. This will provide vital information to detect and prevent market manipulation.
Completely impossible. Again, it's a world-wide market. At best, you're going to prevent people from doing business with or through US-owned banks and force people to use foreign-owned banks.
Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab.
That's not true. The price can go up or down. Why would anyone buy a barrel of oil from someone at a price higher than they had to? If you try to sell me oil with $2 of "extra costs"...I'll go to someone else and buy it for only $1.90 in "extra costs". This will go on long enough that only people selling at the true value will have buyers.
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Anyone who believes that the price of oil is being driven up by speculation alone should back that position up with cold, hard cash and short a whole bunch of oil.
The price of oil is also determined by people's belief about future supply and demand, but people's beliefs can't be regulated.
This is a classic "Pay no attention to the man behind the curtain" move. The airlines are widely hated for raising fees and screwing passengers, so they say, "don't blame us! it's those blasted speculators!"