CFTC plans to go forward with oil futures

Even as oil futures continue to climb in price in response to global political circumstances, the energy industry must begin adjusting to the upcoming imposition of position limits on the sector, according to Risk Magazine.
 
Coming as a part of the massive financial reform implemented by the Dodd-Frank Wall Street Reform and Consumer Protection Act, position limits will put a firm cap on the number of oil and gas futures an energy company can hold, as well as the proportion of the overall market.

The rule comes after concerns arose that speculation within the oil futures market had caused spikes in oil prices, particularly in 2008 when the commodities value skyrocketed and drove up costs for numerous commodities around the world.

Bloomberg reports that two industry groups, the International Swaps and Derivatives Association and Securities Industry and Financial Markets Association, filed a suit attempting to stop the new rule, but the Commodity Futures Trading Commission has called on the court to dismiss the complaint.


"Our mandate from Congress and the President has always been crystal clear: impose position limits," CFTC Commissioner Bart Chilton said in a statement, according to Risk.

Further information on oil futures can be found at PennEnergy's Research area.



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