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Comment for Proposed Rule 75 FR 4143

  • From: Carl Mitchell
    Organization(s):
    EV Oil Co Inc

    Comment No: 15232
    Date: 4/13/2010

    Comment Text:

    10-002
    COMMENT
    CL-06232
    From:
    Sent:
    To:
    Subject:
    EV OIL CO., INC.
    Tuesday, April 13, 2010 10:39 AM
    secretary
    Proposed Speculative Position Limits for Energy (File #10-002)
    David Stawick, Secretary
    U.S. Commodity Futures Trading Commission
    Three Lafayette Centre
    1155 21
    st
    Street, NW
    Washington, D.C. 20581
    Email: [email protected]
    Fax: (202) 418-5521
    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
    bona fide
    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 and10-002
    COMMENT
    CL-06232
    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 consideration.
    Sincerely,
    Carl Mitchell
    E V Oil Co., Inc.
    66 Fall River Ave
    Rehoboth, MA 02769