[ExSES]

If the CFTC does as we expect and reclassifies index traders and swaps dealers as speculators instead of hedgers it will increase their margins substantially and more important it will impose position limits. If this happens prices will drop. We have no clue about timing. It could be two weeks or two months, but when it comes there will be a substantial drop in crude oil prices.

This new found "public spiritedness" (at the point of a Congressional skewer) will merely result in greatly increased trading of oil futures outside the US!

Money flows at the speed of light to where the biggest bang for the buck can be found and there is no more fungible commodity on the planet than oil!

I wonder where the huge pension funds and international government investment entities will trade?

[SAJ]

As I pointed out to nicola_tesla, every foreign futures exchange has position limits. The problem is that the pension fund/investment bank cabal are skirting them. The US is the only nation on the planet where this occurs, with ''legal'' sanction, on a large scale, and this practice must either stop or be stopped.

If ERISA is held over the pension funds' heads (as it should be), they won't move offshore -- they'll get out of the futures game entirely, which is also as it should be.

Neither will the investment banks move offshore; when they trade for their own account, they're already classed as specs, and as such subject to position limits.

The specs will indeed go, like lightning, to other exchanges IF they see an advantage in doing so. If the current situation is properly handled, there will be no such incentive.