Oil prices reached a record $147.27 per barrel in 2008 and that helped cripple some airlines; now, the U.S. is considering new rules that would curb speculative trading on commodities and Delta Air Lines is among those urging strict limits. General counsel to Delta, Richard B. Hirst, wrote the Commodity Futures Trading Commission (CFTC) saying, “The speculative bubble in oil prices has concrete detrimental consequences for the real economy,” according to Bloomberg news. Companies joining Delta in the push for limits on commodities trading believe that the current trading structure creates a system that benefits financial speculators to the detriment of consumers. CFTC appears set to altogether miss, without repercussion, its first action deadline set earlier by the Dodd-Frank financial reform bill.
Financial industry interests have recommended delaying implementation of limits on speculative commodities trading. The CFTC commissioners said they will consider setting limits on commodities including oil, and said Wednesday that they would miss a mid-January deadline. Currently, it seems the organization may phase in limits after a comment period. The intent of the new rules is to limit the influence that one firm can exert on the market and control extreme price fluctuations that aren’t driven by demand of actual physical commodities.
