Wall Street Flies High on Increased Oil Prices

Yesterday on the Dylan Ratigan Show, Better Markets President Dennis Kelleher discussed the role speculators on Wall Street play in driving up oil and fuel prices.  Over the last decade, speculation in the commodities market by large banks and firms has doubled while the cost of a barrel of oil has ranged between $31 to $145.  Thousands of pilots lost their jobs as their employers declared bankruptcy due to the oil price spike.  The Dodd-Frank Act of 2010 will help curb excessive oil speculation by introducing transparency into the commodities market.  Dodd Frank requires the CFTC and SEC to issue and enforce position limits to limit excessive oil speculation and provide more transparency.  However, the CFTC is more than a year late on its congressionally mandated deadline to enforce these provisions of the Act.

Wall Street is spending tens of millions of dollars to delay and water down these final rules.  As a result, ALPA has become a key supporter of legislation introduced by Senator Bill Nelson (D-FL) S. 1598 “The Anti-Excessive Speculation Act of 2011.” S. 1598 seeks to provide even more transparency in the markets, prohibits any person from holding or controlling an excessive speculative position, directs CFTC to establish aggregate speculative position limits and further protects the interests of legitimate hedgers like airlines and farmers.  Fuel is the number one cost to the airline industry, and curbing volatility and price spikes caused by excess speculation is a priority to protect pilot jobs.

Watch Dennis Kelleher on the Dylan Ratigan Show  

Read ALPA’s Support Letter for S.1598

 

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