Comment Text:
U.S. Commodity Futures Trading Commission
Three Lafayette Centre
C0~4~E~i
1155 21
st
Street, NW
Washington, D.C. 20581
i0-002
COMMENT
CL-02703
Subject: Comments on Proposed Speculative Position Limits for Energy (File #10-002)
Dear Mr. Stawick:
I am writing today to endorse comments submitted by the Petroleum Marketers Association of America and the
New England Fuel Institute submitted on April 9, 2010 on 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 writing to
add my own thoughts on this matter to the public record.
Futures markets were designed as a tool for
bonafide
commercial businesses and end-users to manage risk and
"discover" prices for energy based on supply and demand 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 rulemaking, the Commission has an opportunity to take an
important step in this regard. It will be addressing the main cause of recent market instability -
excessive
speculation.
Financial investors, including banks, hedge funds and index funds, speculate in the energy
commodities markets' for profit, rather than commodity-related businesses and users, who do so to protect
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 statutory obligation, if not a compelling moral obligation, to establish hard limits on the
size of positions that speculators can take in these markets, and to bar them from any exemptions. The rule that
has been proposed is not perfect, and again, I strongly urge the technical improvements suggested by the
comments I have written to endorse.
In considering the rule, Commissioners must look past opposition by the financial community and remember
the affect that excessive speculation has on businesses like mine, my consumers and the broader economy. It
should establish restrictive Speculative position limits, and implement them expeditiously, before we see a
repeat of the 2007-2008 energy bubble and another major shock to a country still recovering from recession.
Thank you for your cot~sideration.
Dab Bogan, L.E. B,~her,
in:
615 St. James ~e.~/
Springfield, MA 01109
