Washington (Platts)--23Jun2008

Senator Barack Obama, the Democratic presumptive presidential nominee,
has called for tighter regulation of energy markets and speculators as a way
to rein in commodities prices.

Obama, in a statement, said he would fully close the so-called "Enron
loophole" as well as work with the International Organization of Securities
Commissioners, known as IOSCO, to tighten regulations on oil futures markets
worldwide.

Obama would also work to close the so-called "London loophole" that
allows US energy futures to be traded on offshore exchanges. He also called
for more investigation of what he considered "market manipulation" and
reiterated his support for a so-called "windfall profits" tax on oil companies
when the price of sells over $80 a barrel.

"For the past years, our energy policy in this country has been simply to
let the special interests have their way -- opening up loopholes for the oil
companies and speculators so that they could reap record profits while the
rest of us pay $4 a gallon," Obama said Sunday.

Obama said that speculation has added about $20 to $50 to a barrel of
oil. The US Commodity Futures Trading Commission, however, has said that
fundamentals of tight supply and higher demand are mainly responsible for
record crude oil prices and that speculators merely follow trends, rather than
set them.

Obama said his administration would require that US energy futures trade
on regulated exchanges, and that US energy futures cannot be traded on
"unregulated" offshore exchanges, a direct reference to ICE Futures Europe,
where more than a third of WTI light sweet crude futures are traded, in what
is called a "lookalike" contract to NYMEX futures.

Most of the changes proposed by Obama are already in the works, either
through the CFTC itself, or by US legislators. Last week, ICE Futures Europe
agreed to "begin the process" of imposing position and accountability limits
on its linked crude oil contract, Walter Lukken, acting chairman of the CFTC,
told two Senate committees.

Obama also called for more "vigorous" investigations by the CFTC into
what he called market manipulations of oil futures. The CFTC in late May
however announced that it has been conducting an investigation since late
December into the oil futures market to see whether there has been any market
manipulation during a period in which prices have risen sharply.

--Daniel Goldstein daniel_goldstein@platts.com