Oil, Gas Market Speculation May Face Restrictions

[jk]

limiting ways to invest in energy...


July 7 (Bloomberg) -- U.S. regulators say they may clamp down on oil and gas price speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds.
The Commodity Futures Trading Commission will hold hearings this month and next to explore the need for government-imposed restrictions on speculative trading in oil, gas and other energy markets, Chairman Gary Gensler said today in a statement., ....etc


http://www.bloomberg.com/apps/news?p...d=aIEgmYChpWg8

[WildspitzE]

Re: Oil, Gas Market Speculation May Face Restrictions

With all due respect to Chaucer, stupid is as stupid does.

[charliebrown]

Re: Oil, Gas Market Speculation May Face Restrictions

ok, does anybody know what this means?

I have postions in dbc, and ung. If they come out with a ruling that says you can only own futures if you are''nt hedging the commodity that you own, then what happens to dbc? ung? uso? etc.

Does DBC get one chance to sell the contracts and pay cash to all the share holders? does DBC go to zero??? What would that do to the markets if the ETF's are forced to withdrawl.

If we are not allowed to own these anymore what other vehicles do I put my energy money into? Corporate shares? Currencies that are tightly coupled to energy, FXC, FXA?? I suppose if I have to use a corporate shares as a proxy for the futures, are there companies whoose value is more tied to proven reserves in the ground rather than exploration, refining, delivery etc?

You know everyone uses energy, If my DBC or UNG takes a hit, a at least have the solace of knowing my drive to work is going to cost less or my winter heating bill is going down. So in effect I am hedging. But my real reason for owning these things is protection against a dollar collapse, inflation and a belief in peak oil.

And if they are going to stop j6P ability to own commidities, what else are they going to deny? If there was a fund like GLD who instead of gold bullion keeps oil in tanks could this work? Or would the storage and shipping costs eat you alive?

Anyhow, if they take away my ability to preseve my wealth in energy, I am going to go "jtab" on them and move a big chunk of that to pm's. I just hope that I get a fair payout if the ETF's are shut down.

[pwcmba]

Re: Oil, Gas Market Speculation May Face Restrictions

I've always hated ETFs but couldn't fully detail why (it was like a hunch or a bad feeling). Today I saw 2 reasons specific reasons why one should run away - WOW!