ATA applauds Obama administration white paper on oil trading

The Air Transport Association of America (ATA) today applauded the Obama administration on the issuance of its white paper addressing excessive unchecked speculation that artificially drives the price

The Air Transport Association of America (ATA) today applauded the Obama administration on the issuance of its white paper addressing excessive unchecked speculation that artificially drives the price of oil and needless volatility, taking a toll on consumers.

“The paper does an excellent job of analyzing one of the biggest problems again facing our nation – price swings that cannot be explained by the physical market for oil,” said ATA president and CEO James C. May. “The white paper notes that a major source of America’s financial meltdown was unmonitored, over-the-counter (OTC) derivatives transactions. ATA supports the administration’s recommendation to require the regulated clearing of all standard OTC transactions.”

May continued, “Adding transparency to this type of trading will prevent another meltdown by plugging a major loophole that currently allows billions of dollars of unmonitored oil transactions that have driven jet fuel, diesel, heating oil, and gasoline prices through the roof.”

Separately, May struck a note of caution stating that the white paper does not go far enough in at least one respect. “We are convinced that the public’s ability to see how much oil or natural gas has been bought or sold is essential, so that the public is not blindsided.”

ATA supports imposing aggregate speculative position limits across trading venues, which will level the playing field and treat all speculation equally whether on a regulated exchange or over the counter. ATA has consistently stated that all of the loopholes created in 2000 commodities law should be eliminated.

“These loopholes enable speculators to exercise undue influence on the price paid by consumers for essential commodities,” said May.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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