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Comment for Proposed Rule 75 FR 4143

  • From: Daniel D Vessio
    Organization(s):
    Nulite Fuel Oil Co Ltd

    Comment No: 11701
    Date: 4/21/2010

    Comment Text:

    David Stawick, Secretary
    U.S. Commodity Futures Trading Commission
    Three Lafayette Centre
    1155 21 st Street, NW
    Washington, D.C. 20581
    i0-002
    COMMENT
    CL-02701
    Subject: Comments on Proposed Speculative Position Limits for Energy (File #10-002)
    Dear Mr. Stawick:
    ! 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 2007-2008energy 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 Comrnission 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 comnmnity 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-consideration.
    Slnc
    .
    NULITE FUEL OIL CO. LTD
    87-25 MYRTLE AVE.
    GLENDALE, NY 11385