Elliott

The 'Green' Side of Natural Gas

On Jul 30 04:22 AM Freya wrote:

> If the CFTC curbs trading, how will it impact any Energy market?

By making it better. The CFTC position limits will not hamper the legitimate energy professional who needs to hedge or swap; instead, they will be targeted at the purely financial speculators who are trying to make a fast buck and who never intend to actually produce or consume physical energy.

Futures markets are vital in balancing the risks and needs of wholesale producers and consumers of any commodity. It's very important to control and limit the influence of hedge funds and hot money, so they don't distort the market and upset the equilibrium of supply and demand.

It's incredibly obvious that oil and gas hit new highs in 2008 because hedge funds and speculators bid up the prices. This, in turn, encouraged the drillers to overcapitalize, drill and produce at a faster rate than we were consuming. That's why we have a natural gas glut today.