* Lawmakers urge CFTC to act as gas nears $4 a gallon
* Nearly 70 lawmakers say CFTC inaction has hit US consumers
* Energy costs top election issue for all sides
* Refinery probe continues-FTC chairman
(Adds comments from FTC chairman, commissioner)
By Christopher Doering
WASHINGTON, March 5 Democratic members of
Congress have urged the U.S. futures regulator to crack down on
excessive speculation in oil markets as retail gasoline prices
rose toward $4 a gallon and pain at the pump gained prominence
in the U.S. election campaign.
The U.S. Commodity Futures Trading Commission should stop
"dragging its feet" on implementing new regulations to stop Wall
Street from dominating the oil market, 23 senators and 45
members of the House of Representatives said in a letter to the
The lawmakers complained that gasoline prices are soaring,
despite plenty of supply and low demand.
"As the cost for American people to fill their gas tanks
continues to skyrocket, the CFTC continues to drag its feet on
imposing strict speculation limits to eliminate, prevent, or
diminish excessive oil speculation," the members of Congress
told the commissioners in a letter.
The letter was signed by Senators Barbara Boxer, Bernie
Sanders and John Rockefeller and Representatives Rosa DeLauro,
among others. All the signers were Democrats except for Sanders,
who is an independent.
U.S. gasoline prices have jumped nearly 30 cents over the
past month and now average $3.77 a gallon, according to data
released on Monday by the American Automobile Association.
The Energy Information Administration reported on Monday
that the average price per gallon was $3.79 in the latest week,
up 27 cents or 7.7 percent from a year ago.
Some analysts say there is little evidence of excessive
speculation in oil markets and that prices are moving over
concerns in the Middle East and strong demand from developing
countries such as China and India.
"Congress is rightfully concerned about the economic
difficulty that today's high oil prices present to American
consumers, but targeting financial speculators simply won't fix
the problem that policymakers are trying to solve," said Blake
Clayton, an energy and national security fellow at the Council
on Foreign Relations in New York.
If concern over Iran sanctions drives oil prices still
higher, U.S. retail gasoline prices could rise above $4 a gallon
when Americans take to the road for summer vacation season.
REFINERY PROBE ONGOING
Pump prices that high could spell trouble for President
Barack Obama as he gears up for the November elections. Obama
has been talking up the issue in campaign-style stops in recent
days, saying there was no quick fix to the problem. Last week in
New Hampshire, he called for an end to tax breaks for the
country's prosperous oil and gas companies.
The Federal Trade Commission is also watching for any signs
of price manipulation or anticompetitive actions by gasoline
refineries as part of an investigation it began last year, FTC
Chairman Jon Leibowitz told lawmakers at a hearing.
"We have found some anomalies among refineries. Their
utilization rates are going down. Their profits are going up,"
However, Leibowitz stressed that past FTC investigations
into price spikes have found that the price of oil, set on the
world market, is the main factor in the price of gasoline.
Last summer, U.S. Attorney General Eric Holder appointed a
task force to look at the issue, which included the FTC and CFTC
as well as several other government agencies.
That task force has "done nothing but sit on its hands,"
said Thomas Rosch, a Republican commissioner at the FTC.
"It has been nothing except a charade designed to let the
public know, or at least think, that we're doing something about
it (gasoline prices). I don't think we're doing anything about
it," Rosch said at a hearing .
Republicans, who blame the Obama Administration for the
rising fuel costs, say the country is paying for the decisions
by the White House to limit offshore oil drilling and delay
approval of the Keystone Canada-to-Texas oil pipeline.
POSITION LIMITS DELAYED
The CFTC's groundbreaking position limits rule, contested in
courts by the financial industry, aims to restrict the number of
contracts a trader can hold in 28 commodities including oil.
The measure was part of the 2010 Dodd-Frank law that was
designed to bring tough new oversight to Wall Street.
The futures regulator, straining with a huge workload
drafting the new rules, has said it could implement some of the
limits by June, and others later this year.
The financial industry sued the CFTC in December, arguing
the agency overstepped its bounds by imposing a flawed rule that
could harm its members and the public.
Jill Sommers, a Republican commissioner at the CFTC who
voted against the position limits, told reporters at
a bankers conference that the limits would affect only about six
players, and may have little effect on the market.
"Is that really going to change the price?" she said. "I
think we've all cautioned against making the leap that just
because we haven't imposed the limits yet that means that when
we impose them there will be some significant effect on price."
(Additional reporting by Timothy Gardner and Roberta Rampton;
Editing by Russell Blinch, Lisa Shumaker and Jim Marshall)