CFTC Chief Says Energy Speculation Sets Record

Mar 18 2011 | 12:32pm ET

Hedge fund speculation in the energy markets is at its highest level on record, the Commodity Futures Trading Commission said.

Speculators, including hedge funds, held more than 1 million energy futures equivalent contracts in January, even before the massive earthquake and nuclear crisis in Japan roiled markets. The figure is 64% higher than it was in June 2008.

Speculation in metals and agricultural markets has risen by a fifth, CFTC Commissioner Bart Chilton added.

The CFTC will begin collecting data about commodity speculation in the third quarter. The agency has been charged by new U.S. financial services regulations with crafting rules designed to curb speculation.

"We were given authority to place limits on speculation as part of the new financial reform law, but we haven't done that yet and we need to, pronto," Chilton said.

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