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WASHINGTON -- The price of retail gasoline would fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy markets, four energy analysts told Congress on Monday. Testifying to a House Energy and Commerce Committee subcommittee, Michael Masters of Masters Capital Management said the price of crude oil would drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135. Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy agreed with Masters' assessment at the hearing. Other witnesses say speculators aren't a major factor in oil prices, however.
I saw something the other day where if the US clampted down on oil traders here in the US markets,they would just move to the foreign markets where they have little to no rules.This would farther drive oil prices up.This is becomming one hell of a mess.
A new study authored by IER economist Robert Murphy , Speculators Fixing Oil Prices? Don’t Bet On It , sheds some much needed light on the role speculation plays in the global oil market.
EXECUTIVE SUMMARY
* Record-high oil prices demand a target, and some politicians are increasingly pointing the finger at speculators in the commodities futures markets. But high oil prices are due to restricted supply, booming demand, and a weakening dollar.
* There is no hard evidence that speculators are responsible for high oil prices. If the price of oil truly were above the level that the fundamentals could support, we would see growing inventories of crude. But inventory levels show no such pattern.
* Speculators provide a vital function. By buying when prices are low and selling when prices are high, they actually make oil prices less volatile. Large investment funds provide liquidity to the commodities futures markets, and allow producers and consumers to concentrate on their core businesses.
* Government restrictions on investment in the oil futures market will only hurt consumers by making the oil market less efficient. New regulations will do nothing to ease oil prices in the long term.
Click here for Murphy’s complete analysis. (60KB PDF).
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"Of all tyrannies a tyranny sincerely exercised for the good
of its victim may be the most oppressive." ~ C.S.Lewis
Hate to admit it, but I stumbled upon this hearing on CSPAN last night and watched the thing until 1:00 AM. Every witness that they paraded before the committee was in agreement that if the margins were raised and ceiling put on the amount that speculators that can not actually take delivery of product are allowed to trade, it would have an immediate and drastic impact. The consensus among the experts seemed to be somewhere between $50-$70/barrel is speculation. They also agreed that some cost of a barrel is always speculative, but normally should be about $12-$15/barrel. Also, they did not feel that traders would run out and pour billions of dollars into unproven overseas exchanges.
The commitee members seemed to understand the concept and have a pretty good idea what they need to do. Simple enough, right? The experts urged them to get this done before the August recess.
My feeling is, like always, the committee will propose somewhate sensible legislation, then it will get all kind of crap tacked on, and more than likely it will either never make it to a vote, or it will be so laden with other garbage that it will either not pass a floor vote or it will be so watered down that it will not have the intended effect.
I am all for free markets, but insane energy costs are going to cripple this already weak economy. This is just the latest bubble, sooner or later I guess it will bust on its own, but at what cost?
If congress can actually get this done, I would think it would restore some sense of confidence in our federal government. If not, I have pretty much lost hope in their ability to accomplish anything.
Interesting thing for Fox news to post.. 
