UPDATE 1-US House bill tags futures-market position limits

(Recasts, updates with CFTC calling for 100 more staffers)

By Charles Abbott

WASHINGTON, July 24 (Reuters) - The U.S. House Agriculture Committee was expected to approve on Thursday a bill to toughen position limits on futures markets as a way to prevent price distortions, two staff workers said.

The bill, "the Commodity Markets Transparency and Accountability Act," also would expand funding and staffing for the Commodity Futures Trading Commission, regulator of U.S. futures markets.

The bill would not open more federal land to oil and natural gas drilling, a step favored by Republicans who say oil prices can be brought down by developing more domestic petroleum supplies, said the staff workers who spoke on the condition of anonymity.

Committee chairman Collin Peterson said two weeks ago that stronger position limits were the best response to worries that speculators were driving up the prices of oil and other commodities. He also said the committee might produce more than one bill involving futures market regulation.

Peterson, a Minnesota Democrat, worked with senior members of the Agriculture Committee during the past couple of weeks to shape the bill on position limits. Peterson has opposed higher margin payments on futures contracts, a step proposed by some who seek to limit speculation but opposed by many traders.

CFTC commissioners told Congress this spring they need an additional 100 employees to cope with booming trading volumes and to carry out duties created by the 2008 farm law. These include a requirement for electronic exchanges to provide stronger oversight of traders to prevent manipulation or price distortion.

In recent months, the agency has instructed a number of overseas exchanges to apply the same speculative limits and reporting standards as U.S. exchanges if they want access to American customers. (Reporting by Charles Abbott; Editing by David Gregorio)