Natural gas contracts may be subject to greater market supervision if the U.S. House of Representatives passes a bill intended to curb speculative trading. Congress is considering legislation seeking to modify the Commodities Exchange Act by redefining natural gas as an agricultural commodity. This will make all contracts--futures, swaps and hybrid instruments--subject to regulation by the Commodity Futures Trading Commission.
The bill limits the maximum daily price fluctuation for trading to no more than 8% in either direction compared to the previous day's settlement. It also requires filing large position reports, whose size the CFTC would determine. The bill's authors, Missouri Republican Sam Graves and Georgia Democrat John Barrow, say this will deter market manipulators, who will receive heftier fines and longer jail time if the legislation passes.
Some officials, however, say the bill may not become law. Howard Schneider, a partner with Katten Muchin Zavis Rosenman in New York, thinks the bill won't be signed into law, because it lacks broad support.
