WASHINGTON – Congressman Bart Stupak (D-MI) announced that he would be introducing this week legislation aimed at better regulating the multi-billion dollar oil futures speculation market. 

“Seventy-five percent of this vast futures market operates without transparency and without oversight,” Stupak said.  “As fears about gas prices build, there is the potential for speculators to take advantage of these fears and inflate crude oil prices beyond reasonable levels.   This creates a snowball effect and consumers ultimately pay the price at the pump.” 

There are currently two types of oil futures speculation.  Market trading takes place through the New York Mercantile Exchange and is overseen through the Commodity Futures Trading Commission (CFTC).  However, most oil futures speculation occurs “over-the-counter.” This speculation is conducted off of the market, without any regulation or oversight by the CFTC. 

“Because these over-the-counter trades are unregulated, the exact volume of trading is unknown,” Stupak said.  “It is almost impossible to determine the true impact speculators have on oil and gas prices.  Oil price increases are based on speculation and fear, which fuels greed, and higher prices at the pump.”

Stupak’s bill, the Prevent Unfair Manipulation of Prices or PUMP Act, would require over-the-counter speculators to report to the Commodity Futures Trading Commission, just as on-market traders already do.  This increased oversight would improve confidence in the market and help eliminate the unreasonable inflation of crude oil prices.  The legislation would also increase penalties for speculators found to be unfairly manipulating the oil futures market. 

Stupak has been a longtime advocate for consumers at the gas pump.   Stupak is also the author of the FREE Act, legislation that would instruct the Federal Trade Commission to define gas price gouging and empower the Federal Trade Commission and Department of Justice to crack down on gas price gouging. 

As the Ranking Democrat on the Oversight and Investigations Subcommittee, Stupak has been calling for the past eight months for congressional hearings into gas price gouging. 

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