US and UK team up to restrict oil speculators – will it make a difference?

First, the biggest regulatory concern has been solved, with both Washington and London involved.

The U.S. Commodity Futures Trading Commission and its British counterpart reached a deal with ICE Futures Europe to impose regulations on West Texas Intermediate oil contracts that trade on the London-based electronic exchange within 120 days.

That said, the head of the exchange warned American lawmakers that he doesn’t think rampant speculation is a major driver in oil prices:

Charles Vice, president and chief operating officer of the Intercontinental Exchange, based in Atlanta, said it was “highly unlikely” that ICE Futures Europe was the “primary driver” behind WTI prices.

The CFTC is hedging its bets, probably to appease Congress:

The CFTC acting chairman, Walter Lukken, whose agency is conducting an inquiry into oil markets, acknowledged that “the environment is ripe for those wanting to illegally manipulate the markets.

However, the top U.S. futures market regulator said there was no “smoking gun” indicating that speculators were to blame for record oil prices.

And T. Boone Pickens says it’s a waste of time:

Other people disagree with Vice and Pickens, including Mark Cooper, director of research for the Consumer Federation of America, and Michael Greenberger, the CFTC’s director of trading under President Bill Clinton.

I agree with Cooper, Greenberger and others that the additional oversight is helpful. However, as for actual effect on oil prices? I’m pretty much in Boone Pickens’ camp.