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Congress Finally Ready to Meddle in Oil Markets

US Senator and majority leader Harry Reid (D-NV) unveiled what he's calling an anti-oil speculation bill on Wednesday, winning applause from the airline industry and even some scant praise from Republican senators. Reid's bill, which he hopes to put to a vote before Congress' August recess, would limit the number of oil futures an investor could hold as well as demand greater transparency from foreign markets and US traders who do business abroad.

Reid admits his legislation won't completely end speculative investing--isn't all investing speculative?--but his idea is to distinguish between investors actually in the market for oil to burn (like airlines) and those in the market for profits, with no intention of actually taking delivery (like hedge funds and investment banks).

While Republicans are also eager to score some points on the oil price issue this election season, they may have a chance to kill Reid's pro-regulation bill by tacking on drilling provisions. House minority leader John Boehner (R-OH) says just stopping speculation isn't enough:

It's just another excuse not to drill. Without speculators, you have no liquidity in these markets.

Related Stories:
· Reid Offers Speculation Bill, Drawing Mixed GOP Reaction [National Journal]
· US Senate Oil Speculator Bill Drops Higher Margins [Reuters]
· ATA Applauds Sen. Reid [MarketWatch]
· Oil Prices coverage [Jaunted]

[Photo: Clinton Steeds]