Washington (Platts)--24Jun2008

US Senator Byron Dorgan on Tuesday introduced legislation he hopes will
lower soaring oil prices by expanding the Commodity Futures Trading
Commission's oversight of all petroleum markets and increasing margin
requirements for speculators.

The North Dakota Democrat's End Oil Speculation Act of 2008 would require
the CFTC to redefine "legitimate" hedgers as commercial producers and
purchasers of actual physical petroleum products. All other trades would be
classified as "non-legitimate hedge trades" and would be subject to an
increase in margin requirements to 25%. Dorgan said current margin
requirements range from 5% to 7%.

In addition, Dorgan's bill would make all traders in the petroleum
futures market, including those outside the US, subject to CFTC regulation
"unless and until there are regulations that are substantially identical to
the CFTC's regulations and that are fully and effectively enforced."

Dorgan's bill also would require the formation of an international
working group of regulators to ensure the petroleum markets are free from
excessive speculation.

Dorgan said the energy markets are "just full of ... excess speculation"
and believed there is nothing in the supply/demand fundamentals to justify the
extreme hike in petroleum prices. He criticized the CFTC, saying it is
"completely devoid of any aggressive action" to reduce speculation.

The senator's bill is the latest in a series of House and Senate measures
designed to limit speculation in oil and other energy markets.
--Jessica Marron, jessica_marron@platts.com