http://money.cnn.com/2008/06/17/news/economy/oil_trading/index.htm?cnn=yesNEW YORK (CNNMoney.com) -- Fed up with soaring oil prices and a chorus of people blaming Wall Street speculators, Congress is considering a host of rules aimed at limiting the inflow of investor money into oil contracts.
But oil traders urge caution. While more disclosure is a good thing, they say making it harder for speculators to invest in oil futures could have the opposite effect intended, and send prices higher.
Proposals have included requiring foreign exchanges to provide more information about crude oil trades, limiting the number of contracts speculators are allowed to hold, increasing the amount of money speculators need to put up to buy an oil contract, and removing speculators from the market entirely and limiting trade to just producers and consumers.
Another trader agreed, especially when it comes to doing something such as raising margin requirements, the amount of money traders are required to put up to buy contracts.
"You're raising the cost of doing business for the people who need the futures market," Stephen Schork, publisher of the industry newsletter The Schork Report, told CNNMoney.com. "In the long run, it's bullish."
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"Raising the cost of doing business for the people who NEED the futures market"???? Can somebody explain why anybody needs the futures market. The article even refers to 'bets' and countering 'bets'. Why, if futture trading is such a needed function, isn't it expanded to the consumer level. I'll pay $45 for that jacket on Sept. 1, which you're trying to sell for $65 today.