(WASHINGTON) -- Excessive speculation in the oil futures market may be costing you 15 percent or more at the gas pump and playing a "significant" role in rising gasoline prices, according to a joint letter from 68 members of Congress that ABC News has obtained an advanced copy of.
The joint letter urges immediate action by the Commodity Futures Trading Commission (CTFC) to install caps on the biggest traders on Wall Street, preventing them from controlling unusually large positions in the oil futures trading market.
The 68 members of Congress cite a recently updated report by the St. Louis Federal Reserve titled "Speculation in the Oil Market," which concluded there are two main factors for large price swings at the gas pump.
First, it says, "global demand shocks" such as those caused by turmoil in the Middle East "account for the largest share of oil price fluctuations."
Second, it notes, "speculation played a significant role in the oil price increase between 2004 and 2008 and its subsequent collapse. Our results support the view that the financialization process of commodity markets explains part of the recent increase in oil prices."
The Federal Reserve paper also puts a price on how much extra consumers may have had to pay at the pump during the Federal Reserve's five-year study period, saying, "speculation contributed around 15 percent to oil price increases" during the five-year period analyzed.
Sen. Bernie Sanders, a Democrat from Vermont, has pushed for reform on Wall Street for years. He says the Federal Reserve report is significant.
"If the St. Louis Federal Reserve, a conservative institution, is saying speculation is contributing significantly to the high price of oil and gas at the pump, then I think that is clearly what the case is," he said.
Sanders authored the joint letter and plans to send it Monday afternoon, once his staff has formally gathered the signatures of the 67 other members of Congress who have pledged to sign on.
The letter cites a failure on the part of the CFTC to enact "position limits" on those who trade in the oil futures markets. The Dodd Frank Act required the CFTC to develop and enforce those limits by January 2011. More than a year later, they are not in force.
"As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation as required by the Dodd-Frank Act," they write. "Although the CFTC has adopted initial position limits, they are not strong enough and not yet in force owing to industry opposition, delays in swaps oversight and data collection. This is simply unacceptable and must change."
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