AMERICAS: ATA supports rules on speculative trading

The Air Transport Association (ATA), the industry trade organisation for US airlines, submitted public comments to the Commodity Futures Trading Commission (CFTC) in support of the proposed rule on speculative position limits for certain energy contracts. “Oil speculators exploit gaps in the regulatory structure to drive up oil prices out of sheer greed,” said ATA […]


The Air Transport Association (ATA), the industry trade organisation for US airlines, submitted public comments to the Commodity Futures Trading Commission (CFTC) in support of the proposed rule on speculative position limits for certain energy contracts.

“Oil speculators exploit gaps in the regulatory structure to drive up oil prices out of sheer greed,” said ATA president and CEO James C. May. “The proposed CFTC rule, particularly if strengthened, would limit excessive speculation and the ability of investment banks and large financial interests to dominate oil markets at the expense of consumers.”

The CFTC rule proposes to establish speculative position limits and increase market transparency and reporting requirements. These measures will provide regulatory support for a return of supply-and-demand fundamentals in the marketplace. Additionally, these reforms will help address the high fuel prices and volatility seen by consumers in recent years.

The ATA made the following points: The proposed speculative position limits should be strengthened; excessive speculation distorts oil markets, causing higher prices and increased volatility; excessive speculation has contributed to lost jobs, reduced service and industry losses; evidence demonstrates that speculative trading, volatility and high prices are linked; index funds and other passive investors should be subject to position limits; and exemptions should be limited and apply narrowly to true end users.