UK joins debate on speculators in oil markets
LONDON, July 14 (Reuters) - A British parliamentary panel will on Tuesday join in the debate on why oil prices are at record levels above $145 a barrel and whether speculators have played a role.
The UK Treasury Commmittee will grill economists, executives from electronic exchange ICE Futures Europe (ICE.N) and officials from the UK regulator the Financial Services Authority.
The hearing illustrates growing pressure on politicians to take action over record oil prices, which have caused protests from consumers around the world.
In the United States, there is already a raft of bills in Congress seeking to limit speculation in oil futures markets that some blame for driving up prices.
The U.S. commodity market regulator, the Commodity Futures Trading Commission, has taken steps to extend some of its rules to a contract in U.S. crude oil traded on ICE Futures Europe, which is regulated by Britain's FSA.
"We have agreed to have U.S.-style regulation of that contract," said a spokeswoman for the ICE. She said this still had to be approved by the FSA.
The CFTC rules would impose trading limits on the U.S. crude oil contract traded on ICE's electronic platform.
This contract has been described in the United States as the "London loophole," because it allows trading in U.S. crude oil futures to take place outside U.S. rules.
But some, including the International Energy Agency, see blaming speculators for high oil prices as an easy solution that avoids hard choices countries must make to boost supply or curb demand.
Others in the futures industry warn against interfering in markets.
"We need to be extremely careful about being drawn into knee jerk reactions based on populist politics," said Anthony Belchambers, chief executive of the UK-based Futures and Options Association.
He warned against excluding legitimate financial interests from using futures markets, saying this would undermine their liquidity and make it difficult for commercial users to hedge.
Those giving evidence to the Treasury committee include: the chairman of ICE Futures Europe, Bob Reid, Chairman and Chief Operating Officer David Peniket and director of regulation, Dee Blake.
Also giving evidence before the panel chaired by Labour Member of Parliament John McFall will be the FSA's markets division's director, Alexander Justham, and Jonathan Hill, a technical specialist for commodities in the division.
