CFTC boosting oversight of foreign oil trades

The Commodity Futures Trading Commission said it will require the London-based ICE Futures Europe exchange to adopt position limits used in the U.S. for the trading of the West Texas Intermediary crude-oil contract, which is linked to a similar contract on the New York Mercantile Exchange.

Under the new agreement, foreign officials also will share daily trading data with U.S. authorities and report violations when they are uncovered. Previously the groups shared data on a weekly basis.

Atlanta-based Intercontinental Exchange Inc., parent company of ICE Futures Europe, plans to comply with the new rules and said the CFTC action would have almost no affect its customers or business.

Lawmakers, who are increasingly blaming speculation by index funds and other large investors for artificially boosting oil and other commodity prices, greeted the CFTC announcement with skepticism.

"Why didn't we do this nine to 10 months ago when things first appeared to be moving faster than usual?" asked Sen. Ben Nelson, D-Neb, at a hearing to assess the agency's performance. "The sense of urgency on the street seems to be different from the sense of the bureaucracy. We need to match that urgency."

Light, sweet crude for July delivery fell 60 cents to settle at $134.01 a barrel on the Nymex Tuesday, which is still up nearly 35 percent since the beginning of the year.

CFTC Acting Chairman Walter Lukken previously told Congress oil prices appeared to reflect market fundamentals.

But in the past month the agency has taken a flurry of actions to gather more data on unregulated trading, including over-the-counter swaps. The CFTC said it would report to Congress on what it learns from the new information by September.

"I hope they'll be able to give us a more complete picture of the trades coming in through London and over-the-counter swaps," Sen. Dick Durbin, D-Ill., said in a phone interview after the hearing he chaired. "If we see hedge funds and pension funds moving massive amounts of money through this marketplace, it will mean we have to do even more."