Coalition Implores Congress to Crack Down on Oil Speculation
Michael Fabey, Travel Weekly, 7/11/2008
Editor's Note: On July 10, CEOs of twelve U.S. airlines issued an open letter to their customers stating their position on oil speculation and the need to reform the oil markets. To read this letter, click here.
Blaming institutional oil speculators for a major portion of the huge increase in fuel prices over the past year, the Stop Oil Speculation Now Coalition called on Congress Friday to convene a panel of oil-trading experts to help establish tighter limits on such trading.
"There is no greater crisis, not only for the airline industry but across the board," James May, CEO of the Air Transport Association, said during a coalition press conference.
He said Congress could not postpone taking action.
"Congress needs to act immediately -- before the August recess," he said. "Congress needs to act in a bipartisan fashion."
The problem is not with traditional oil traders but with institutional investors who have flooded the market relatively recently, artificially inflating the price of oil because of the lack of limits on the amount of trading and speculating they can do, according to May and other coalition members.
Coalition members include the Agricultural Retailers Association, Air Carrier Association of America, Air Line Pilots Association, American Association of Airport Executives, American Bus Association, American Trucking Association, Association of Corporate Travel Executives, Gasoline and Automotive Service Dealers of America, National Business Travel Association, National School Transportation Association, Petroleum Marketers Association of America, Regional Airline Association, International Brotherhood of Teamsters and United Motorcoach Association.
The coalition estimates that its efforts have prompted a million email messages to Congress to address the trading issue.
The price of oil now is about $147 a barrel. May said he would like to see it drop by about $30.
The U.S. Department of Transportation has denied any impact on oil prices by such increased speculation, but May said the DOT lacks expertise to make such a claim.
If Congress fails to act now and the speculation goes unchecked, May predicted grave consequences for the airline industry, including more capacity cuts, job losses and market withdrawals.