Comment Text:
Dear Sirs/Madame:
I am the second generation President and owner of Cundiff Oil Company in Bellmawr, New Jersey. Cundiff Oil Company, a family owned business since 1946, provides heating oil, diesel fuel, kerosene, and HVAC service to approximately 2,000 customers. I have 12 employees - 7 of whom have worked for me for 20+ years. I have customers that have been with me for 50+ years. My industry has successfully pushed for efficiency and product improvement over the years lowering average annual consumption by 75%. Heating oil companies like Cundiff offer a safer, domestically produced, “greener”, environmentally friendly footprint, with superior personal service when compared to that provided by the gas utility companies. Now my company faces dissolution due to forces beyond my control. The tenets of Supply and Demand - the standard barometer for determining price – have become superfluous. My margin is “pinched” and each year more of my customers convert to methane gas because methane is not subject to these ridiculous fluctuations in price every winter. While I find myself waking up in the middle of the night, staring at the ceiling, desperately trying to find a way to save my business, hedge-funders, commodities traders, & investment bankers make a killing by promulgating artificially high prices and hurting hard working Americans simply trying to survive financially.
As a petroleum marketer and retailer, I am writing to voice my support for immediate adoption of proposed rule (RIN 3038–AD15 and 3038–AD16 Position Limits for Derivatives).
After years of highly volatile commodity markets, the CFTC is finally poised to impose position limits for physical commodities. Dozens of studies by industry experts, economists, academics, and committees in Congress, as well as direct comments to CFTC thru prior rulemaking initiatives and working groups serve only to reinforce the need for meaningful position limits in the commodity markets and therefore adoption of this rule.
I have fully supported my industry trade associations in their efforts to communicate broad industry concerns with a market structure that seemingly no longer serves a valid price discovery function. Massive positions held by speculators have contributed to price volatility that is simply unrelated to supply and demand fundamentals. The recent upheaval in the Middle East only reinforces the urgent need to enforce immediate individual and aggregate position limits on speculators in the commodities markets.
My industry notices the impacts of price volatility every day. Over the last few weeks, rack prices have skyrocketed which has detrimentally impacted petroleum marketers and retailers. Many businesses in my industry engage in hedging to protect acquisition costs and take delivery of the product that we, in turn, sell to customers. That simple transaction is now more expensive because hedging costs for product acquisition have increased due to speculation in the market. We see it every day and our customers see it. This rule, in combination with the Commission’s overall regulatory structure, is the best hope to return price stability to commodity markets.
Title VII of the Wall Street Reform Act has acknowledged the potential harm of excessive speculation and has reaffirmed the importance of position limits by providing the Commission with new authorities to impose such limits on currently unregulated markets. I believe the Commission understands its responsibility under existing law to prevent excessive speculation as an undue and unnecessary burden on interstate commerce.
Commodities are vital resources to American industries, businesses, and consumers. Well functioning markets are critical to commodity price discovery. Position limits, as proposed in this rule, will play a critical role in reestablishing market fundamentals. I urge adoption of this rule.
I thank you for your consideration,
Sincerely,
David E. Cundiff, President
Cundiff Oil Company, Inc.
