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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 1278 Introduced in House (IH)]

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;
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;
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
    Resolved, That it is 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.
                                 <all>
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