Closing the Enron Loophole

All of us are aware of the effect high energy prices have on our pocketbooks and on the U.S economy. Experts say that high prices are caused by lack of new supply, increasing demand in developing countries and speculators in energy futures. Some experts think that speculation in the energy markets add as much as $40 per barrel to the price of crude oil. Energy contracts are traded on commodity futures exchanges such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE). These contracts determine energy prices even though approximately 98% are cancelled before physical delivery takes place.

As a result of manipulation of energy futures contracts, 19 people were indicted in the Enron scandal. The Commodities Futures Trading Commission (CFTC) oversees daily trading activity to ensure that these markets operate free from manipulation. The problem is that trading on the ICE exchange is exempt from government reporting.

There is a bill in Congress called the "Close the Enron Loophole Act" which will require all trading to be reported to the CFTC. This legislation should help moderate energy prices and eliminate some of the volatility. The Fuel Merchants Association of New Jersey is asking you to contact your senators and representatives by logging onto www.closetheenronloophole.com and urging them to support this important legislation.

If you have any questions, please call us at 973-383-1421.