1.  Rack prices do parallel the NYMEX WTI crude oil closing price.  NYMEX crude oil prices have increased dramatically in recent months.
  2. Crude oil, gasoline and distillate INVENTORIES remain at or well above their five year average even with the crude inventories decline reported last week.
  3. U.S. crude production is at a six year high and refinery utilization remains above its five year average.
  4. Crude oil, gasoline and distillate DEMAND remains stagnant. Only up 1% from last year.
  5. US dollar weakness is often given as an explanation for rising oil prices.  However, in recent months, the dollar has strengthen against the Euro and other currencies which should result in lower oil prices… but NYMEX WTI oil is up over 18 percent over the last three months.
  6. Investor demand remains quite strong.  Net long positions by investors are at highs not seen since the oil price spike in 2008.

Position limits rulemaking proposed at CFTC sets a “high bar” at 10 percent of open interest, eventually more aggressive limits should be set once other elements of Dodd-Frank are in place.  The rule does not also give the CFTC authority to act immediately to force the largest speculative positions to reduce their size, which is why Chilton’s position points regime is vital.

Also funding is urgently needed, the Congress has legitimate concerns about certain measures in Dodd-Frank and their costs, but the CFTC has been historically underfunded and understaffed, and to stymie additional increases for the sake of partisan politics would not only undermine new trading rules for commodities, but also signal a lack of confidence and create additional instability and uncertainty in the markets

Any further delay will also jeopardize international efforts to impose position limits in Europe and elsewhere.The CFTC was given the position limits authority under the 1936 statute in order to PREVENT excessive speculation, not to study it and then impose limits well after the fact and after a speculative bubble has wreaked havoc on our economy.

They need to act now!