Comment Text:
Vermont Fuel Dealers Association
www.vermontfuel.com
David Stawick, Secretary
U.S. Commodity Futures Trading Commission
Three Lafayette Centre
1155 21 st Street, NW
Washington, D.C. 20581
Fax: (202) 418-5521
10-002
COMMENT
CL-02689
0. F.L O.
COMMENT
Subjeet: Comments on Proposed Speculative Position Limits for Energy (File #10-002)
Dear Mr. Stawick:
I am writing today to endorse comments s~ubm!.tted by the P.¢.t:rg!..eum Marketers Association of
America and the New England Fuel Institute ~ubrhitfed oii April 9~ 20.10' oh the proposed rule to
implement speculative position limits for futures and options contracts for natural gas, crude oil,
heating oil and gasoline. I am also m'iting to add my o~ thoughts on this matter to the public
record.
Futures markets we~'e designed as a tool for
bonaJ?de
commercial businesses and end-users to
manage.risk and "discover" prices for .energY based on supply anddemand economics.
Businesses and consumers rely on these markets and are harmed when they become excessively
volatile or subject to extreme price shocks, as we saw with the 2007-2008 energy bubble. In the
past ten years, such events have become common and federal regulators failed to take assertive
action to address the causes and to restore confidence in the energy futures markets
.: ....
By strengthening and passing this proposed rulemal~ing, the Commission has an opportunity to
take an important step in this regard. It will be ad&essing the main cause of.recent market
instability -
excessive spec~dation.
Financial investors, including banks, hedge funds and index
funds, speculate in the energy commodities markets for profit, l~ather.than 9o .rmn~ odity-related
businesses and users, who do so to protec.t themselves from volatility and risk. Speculators take
on the risk that hedgers seek to shed, however speculation should not dominate the markets.
Moreover, one speculator or class of speculator should not be allowed to take a large, controlling
position in any a single commodity.
The Commission has a sta..tutory obligation, if not a compelling m0,~:al obligation, to ,establish
hard limits on the size o.f positions that speculators can .take in these markets~ and to bar them
fro~ any exemptions. The rule that has been. Pr0Po~ed
,is
not perfect, and again~ I strongly urge
the technical improvements suggested by the comments I have written to endorse.
Vermont Fuel Dealers Association -- 250 Main St., Suite 301, Montpelier, VT 05602
802-223-7750
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[email protected]
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www.vermontfuel.com10-002
COMMENT
CL-02689
In consmerlng the rule, tSommlssloners must look past opposition by me ~lnanclal community
and remember the affect that excessive speculation has on businesses like mine, my consumers
and the broader economy. It should establish resta'ictive speculative position limits, and
implement them expeditiously, before we see a repeat of the 2007-2008 energy bubble and
another major shock to a count~3~ still recovering from recession.
ThaN( you for your consideration.
Sincerely,
Matt Cota
Executive Director
Vermont Fuel Dealers Association
Vermont Fuel Dealers Association -- 250 Main St., Suite 301, Montpelier, VT 05602
802-223-7750 ~
[email protected]
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www.vermontfueLcom
