Senate moves to rein in oil speculation

WASHINGTON, July 16 (UPI) -- Democratic lawmakers introduced a bill Wednesday aimed at curbing speculation in the red-hot U.S. oil market.

The Stop Excessive Speculation Act would primarily seek to establish limits on the number of futures contracts that could be held by investors who are considered speculators.

The measure would not interfere with companies that consume fuel and buy and sell futures for hedging purposes, but would instead try to stem what critics say is a flood of cash from bullish investors who have no intention of taking actual delivery of the physical oil.

The impact of speculation has been a topic of controversy; however, proponents of the limits say they are necessary to let some of the steam out of the market and ratchet down the price of crude oil.

The bill was warmly received by the airline industry, which has been battered by soaring jet fuel prices.

As largely unregulated speculators pocket billions of dollars at the expense of U.S. consumers, the price of commodities has increased out of proportion to marketplace demands," the Air Transportation Association said in a written statement.