July 22, 2008

Oil Bill Pits Airlines Against Investors

High fuel-consuming industries are siding with Democrats in the U.S. Senate in a debate over curbing the activities of oil speculators, observers said.

The struggling airline industry, truck drivers and travel agents are lobbying for the Stop Excessive Energy Speculation Act, which would limit the size of trades non-legitimate investors can make, The Hill, a Washington political newspaper, reported.

Sen. Byron Dorgan, D-N.D., a sponsor of the bill, said Monday, it has become abundantly clear that speculators, not the laws of supply and demand, are driving up prices.

Senate Democrats are aligned against the finance industry and some Senate Republicans who want to leverage their opposition to push for a bill that would open restricted areas to oil drilling, The Hill reported.

The answer to high oil prices lies with supply and demand, not with restricting oil investors, Scott Talbott, senior vice president for the Financial Services Roundtable, said.

U.S. Federal Reserve Chairman Ben Bernanke also favors the supply and demand argument for explaining why crude oil prices rose to nearly $150 per barrel this year before retreating, the report said.