CNN recently ran a story on how congress wants to bring down the price of oil. Being that this is an election year and congress is polling at all time lows, it is understandable that they feel they need to do something. I mean, who wants to get fired from there job. But the big issue is if any of these new regulations will actually bring down the price of oil or will they make the matters that much worse

The first solution is to limit or stop foreign investment and hedge funds from trading oil futures contracts in New York. This is completely ridiculous. It not only will NOT bring down the price of oil, it will force international traders to different market places, thus driving up the price of oil higher. When ever such a law is enacted, immediately another market is created. Thus traders and investors will take their money out of the U.S. (and we need this money to sustain our economy) and go elsewhere.

Raising margin requirements are being proposed. On one level, I am not opposed to this at all. But this should be regulated by the exchange, who in theory is taking on most of the risk of providing a market of oil. The exchange knows what the best margin price is required. However, if an outside body arbitrarily raises margin requirements, true monopolies and cartels will thrive; since they will be the only ones that can afford the margin requirements. This would more than likely result in much higher prices. Think of OPEC on steroids.

Finally, they are prosing to end speculation all together. The last time I checked, I thought that we lived in a quasi capitalist economy, no? How would this bring down the price of oil? If speculation is eliminated, who would set the price? The government? What about property rights? Plain and simple, this is socialism at its worst.

The problem is not speculation or regulation. In fact, I would argue that we don't have enough speculation and way too much regulation. Regulation (or better yet, government involvement) got us in this mess to begin with. Perhaps if companies had more access to drilling areas or different energy alternatives (like nuclear and coal) were brought explored and developed, we wouldn't even be having this conversation.

The speculators are merely saying that the market is tight, and the price needs go up. Perhaps the price is too low, and all of these new laws would make our reserves deplete all the more quicker. And if this were the case, we will see $500 a barrel oil real quick.

Andy