IEA to Hold Meetings on Oil Speculators
Source: Bloomberg, Shigeru Sato and Yuji Okada (1/27/10)
". . .regulators may have to take decisive measures to limit investment by banks."
IEA Executive Director Nobuo Tanaka said today he has asked U.S. Commodity Futures Trading Commission Chairman Gary Gensler, officials of the U.K. Financial Services Authority, and bank executives including Lawrence Eagles, head of commodities research at JPMorgan Chase & Co., to take part. The two-day meeting will start Feb. 25.
The CFTC has proposed curtailing investments by large banks and swaps dealers in oil, natural gas, heating oil and gasoline amid concern speculators drove crude prices to a record $147.27 a barrel in 2008. Speculative net-long positions in oil futures, or bets prices will rise, were the highest in at least 27 years in the week ended Jan. 12.
"OPEC and regulators must have come to the conclusion that a flow of big money from bloated global banks into the commodities market is responsible for big swings in prices for oil and metals," said Tetsu Emori, a chief fund manager at Astmax Co. Ltd. in Tokyo. "Like President Barack Obama, regulators may have to take decisive measures to limit investment by banks."
Investment in energy-sector projects is "adversely affected by oil price volatility and lower demand for oil, when long-range commitments of adequate and timely investment flows are needed to ensure future supply," Saudi Arabian Oil Minister Ali al-Naimi told the April roundtable.
Speculative long positions, or the difference between orders to buy and sell a commodity, fell 1% to 134,381 contracts for New York Mercantile Exchange crude futures in the week ended Jan. 19.
Next month's meeting will be hosted by the IEA, the adviser to 28 energy-consuming nations, and the state-owned Institute of Energy Economics Japan, Tanaka said.