IV 

110TH CONGRESS 

2D SESSION H. RES. 1278 

Expressing the sense of the House of Representatives that the United States 

Government should lead an international diplomatic initiative to limit 

inefficient speculation on international energy exchanges through the 

adoption of international standards for energy futures trading margin 

requirements as an appropriate means of ensuring access to reliable 

and affordable supplies of crude oil. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 17, 2008 

Mr. PETRI (for himself, Mr. WHITFIELD of Kentucky, Mr. LOBIONDO, and 

Mr. MARIO DIAZ-BALART of Florida) submitted the following resolution; 

which was referred to the Committee on Foreign Affairs 

RESOLUTION 

Expressing the sense of the House of Representatives that 

the United States Government should lead an international diplomatic initiative to limit inefficient speculation on international energy exchanges through the adoption of international standards for energy futures trading 

margin requirements as an appropriate means of ensuring access to reliable and affordable supplies of crude 

oil. 

Whereas United States citizens have experienced a rapid increase in the price of gasoline due largely to the increase 

in the cost of crude oil on international markets; 


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•HRES 1278 IH 

Whereas, on June 10, 2008, gasoline prices averaged over $4 

per gallon, a price one-third more than reported in May 

2007; 

Whereas, on June 6, 2008, oil prices on international futures 

markets surged to a new high of nearly $140 per barrel; 

Whereas the price of oil increased by $16 during a 2-day period ending on June 6, with no appreciable increase in 

world demand for oil; 

Whereas, in June 2008, the International Energy Agency revised downward its estimate for world oil demand; 

Whereas international investment capital has flowed into the 

futures markets for commodities of all types, resulting in 

rising prices without corresponding increases in demand; 

Whereas returns in various investment vehicles have been flat 

or in decline, and international money managers have 

been active in seeking profitable uses of available capital; 

Whereas demand for profitable investments is often substituted for demand for the actual product underlying futures contracts; 

Whereas such demand for profitable short-term investments 

is a likely cause for the historic increase in oil and other 

commodity prices; 

Whereas the international financial system has facilitated the 

efficient movement of capital, making it feasible for investors to seek gain over shorter and shorter time periods; 

Whereas the short-term investment of capital in the hope of 

profiting from anomalies in typical demand patterns can 

be termed a speculative activity; 


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Whereas speculation can be facilitated by the efficiency of the 

international economic system, but by itself it is counterproductive to the efficient use of capital and resources; 

Whereas speculative investments in futures contracts can 

often be made without the commitment of the full 

amount necessary to settle the contract at termination; 

Whereas commodity exchanges engage in the requirement of 

margin payments for protection against various negative 

aspects of commodity speculation; 

Whereas an increase in margin requirements reduces the opportunity for short-term speculative profits; 

Whereas margin requirements on energy trading exchanges in 

the United States are minimal and are left to the discretion of the managers of regulated and unregulated energy 

futures exchanges alike; 

Whereas United States Government regulation of margin requirements can affect only domestic markets resulting in 

a shift of trading activity to foreign energy exchanges; 

and 

Whereas speculation in energy prices is inefficient, is encouraged by low margin requirements on worldwide energy 

exchanges, and is antithetical to the goal of reliable and 

affordable energy supplies: Now, therefore, be it 

1 Resolved, That it is the sense of the House of Rep2 resentatives that the United States Government should 

3 lead an international diplomatic initiative to limit ineffi4 cient speculation on international energy exchanges 

5 through the adoption of international standards for energy 

6 futures trading margin requirements as an appropriate 


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•HRES 1278 IH 

1 means of ensuring access to reliable and affordable sup2 plies of crude oil. 

Æ 


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