Comment Text:
U.S. Commodity Future~ Trading Commission
Three Lafayette Centre
1155 21
st
Street, NW
Washington, D.C. 20581
Subject: Comments on Proposed Speculative Position Limits for Energy (File #10-002)
i0-002
COMMENT
CL-02702
Dear Mr. Stawick:
Here in the mountain west of Wyoming we feel somewhat disconnected for what happens on Wall Street, but we do see what
has happened to our wholesale cost of goods that we must purchase to supply our customers. During the energy bubble or
2007-2008 the soaring costs of replacement energy products made for very difficult financial times as we struggled to
balance our cash needs against our accounts receivable mid accounts payable. You have my support to put some control and
restraint on the Commodities Markets.
I encourage you to support the 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 bu;inesses 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 e×treme price shocks, as we sawwith 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 Conm~ission has a statutory obligation, if not a compelling moral obligation, to establish_bard 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 r~cession.
Thank you for your consideration.
Sincerely,
Steven W. Perkins
Perkins Oil Company
PO Box 1068
Rawlins Wyoming 82301
