WASHINGTON -(Dow Jones)- A prominent energy analyst on Wednesday labeled the runup in oil prices an "oil shock" and played down the role of speculators in driving up those prices.
"That we are in an oil shock is clear," Daniel Yergin, the chairman of Cambridge Energy Research Associates, said at a Joint Economic Committee hearing into whether high oil prices are a bubble. "In such circumstances as these, there is a tendency to seek a single explanation. History, however, demonstrates that changes of this scale and significant result not from a single cause, but rather from a confluence of factors."
U.S. lawmakers are rolling out legislation almost daily to limit speculation in the energy markets, which they see as driving prices beyond levels justified by demand. Some proposals would give federal regulators more information about energy-markets trading. Other proposals are stricter, such as forbidding oil- market trades unless buyers were willing to accept delivery of the oil itself, and quadrupling the amount of money that traders must put down in order to bet on oil and other energy prices.
"I believe some of these may do some good - I'm for them," said Sen. Charles Schumer, D-N.Y. But "we need to look beyond quick fixes that will do little for consumers as they pay record prices at the pump."
The comments underscore the compromise approach that some people are pushing for in developing new policies for regulating energy-trading markets. They reflect a consensus around one issue - that the Commodity Futures Trading Commission lacks the information needed to evaluate whether abuses in the markets are artificially inflating prices.
"There's clearly the need for greater transparency in these markets," said Rep. Kevin Brady, R-Texas.
Yergin said he was "really struck" by investor pessimism about future supplies. "Those expectations feed back into price, and these general expectations of very tight supplies are based upon the expectation that the global market cannot generate the responses that are warranted."
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; Siobhan.Hughes@ dowjones.com
(END) Dow Jones Newswires 06-25-08 1139 Copyright (c) 2008 Dow Jones & Company, Inc.
