CFTC Set To Impose Limits On Energy Markets

CFTC Set To Impose Limits On Energy Markets

http://online.wsj.com/article/SB124948893085708197.html

The Commodities Future Trading Commission is all set to announce limits aimed at restricting speculation in the energy markets. The regulator has sought the opinion of several industry players and most of them have favored imposition of position limits in one or the other form. Speculators or the funds who generally do not take physical delivery of a commodity have been blamed for the volatile prices in the recent years. The CFTC believes that position limits can be the remedy and is all set to announce the draft rules very soon. The New York Mercantile Exchange currently sets position limits but only some days before the expiry of a contract, but also grants exemptions to several companies. The CFTC may, however, find it difficult to unilaterally withdraw the hedge exemptions already in place.