Washington, D.C.--Today Sean Cota, co-owner of Cota & Cota in Bellows Falls Vermont testified before the House Agriculture Committee. The committee asked for insight on how the Derivative Markets Transparency and Accountability Act could help heating fuel dealers and consumers. The goal of the legislation is to end the abusive practices by paper oil speculators that has created wild volatility in the energy markets.
VFDA has voiced its concern to Congress regarding the activities in dark commodity markets for more than three years now. It has become abundantly clear that large-scale, institutional investors speculating in the energy markets, were and continue to act as the driving force behind energy prices. The rise in crude oil prices, which reached $147 in July of last year only to fall dramatically to as low as $33 in December was not a result of supply and demand fundamentals it was the direct result of excessively-leveraged speculators, index investors, and hedge funds.
According to a January 11, 2009 60 Minutes investigation titled, Did Speculation Fuel Oil Price Swings? several experts agreed that oil should not have skyrocketed to previously mentioned record levels last year, only to see prices dramatically collapse few months later. The report highlighted how investors were looking not to actually buy oil futures, but to make a fast buck in a paper trade. This practice caused oil prices to rise faster and fall harder than could ever be explained by ordinary market forces alone. American consumers, small businesses and the broader economy were forced onto a roller coaster ride of greed, fear and uncertainty.
To read Cota s entire written testimony contact VFDA 802-223-7750
For the latest information contact the Vermont Fuel Dealers Association
802-223-7750 or www.vermontfuel.com
Vermont heating fuel dealer testifies in Congress
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