Last month we posted articles on the emergence of Congressional concerns about the speculation in energy futures and derivative markets, driven through several ‘loopholes’ and the lassitude of federal commodity trading regulators. Senator Lieberman, as we pointed out in those New English Review and The Iconoclast articles, had conducted substantive hearings on what lay behind the ‘oil bubble’, as we labeled it.

Today on NYMEX oil futures contracts spiked to a record $147.00 a barrel, driven by ‘war risk’ premiums as a result of Iranian ‘war games’, alleged Israel attack scenarios and thugs disrupting production in the important Gulf of Niger. Yesterday, Senators Lieberman, Collins and Cantwell introduced a new bill to address adverse speculation: S 3248, the Commodity Speculation Reform Act of 2008. The news release held out this hope:

In our original New English Review article we noted the following:

Senator Lieberman’s HSGAC hearing on oil and commodity future speculation identified the ‘swaps loophole’ as matters to be addressed. Masters in his testimony at the Senate Committee hearings recommended that Congress move to close the swaps loophole “which speculators use to roll over monthly future contracts, allowing them to ‘effectively circumvent position limits.’”

The CFTC issued proposed rules in November, 2007 to address so-called excessive speculation as defined under 7 U.S.C. sec 6a.

Excessive speculation in any commodity under contracts of sale of such commodity for future delivery made on or subject to the rules of contract markets or derivatives transaction execution facilitates causing sudden or unreasonable fluctuations of unwarranted changes in the price of such commodity.