Published: 07-14-08
WASHINGTON DC – This week Congressman Mike Conaway (TX-11) participated in a three-day series of hearings in the Agriculture Committee to review various pieces of commodity trading legislation that were recently introduced. Conaway made the following statement after the conclusion of the hearings:
“There is conventional wisdom that speculators are having an undue influence on the price of crude oil. Over the course of this week we have been trying to figure out if that is an accurate statement or if it is just a response of frustration aimed at high prices. So far the only credible evidence shows that crude oil prices are being set by the simple laws of supply and demand and the devaluation of the U.S. dollar which is why it is essential that we increase the supply of domestic energy production.
Walter Lukken chairman of the CFTC previously testified that while they look for market manipulation meticulously they have yet to be able to prove or even to establish a link between current speculators and current prices. We must distinguish between speculation and undue manipulation. Markets should never be manipulated – that is a crime. However the prospect of speculating in markets is part of the process. In order to have a willing buyer for every seller and a willing seller for every buyer you must have speculators in the market.
This issue is one that has gotten heavy coverage in the media and many Americans strongly believe there is a direct link between the number of speculators in the market and the rapid run up in the price of crude oil. However when trying to craft laws and responses to circumstances we must figure out what went wrong and understand the conduct that should be regulated before we try to figure out how to regulate the conduct.
I am proud of the work that Chairman Peterson has done thus far in the Agriculture Committee to get facts on the table before trying to move legislation on the House Floor. I look forward to participating in the mark-up legislation should we find that necessary.”
Congressman Conaway is a Member of the House Committee on Agriculture.
