As I understand it, US investment banks technically own more than 1.1 billion barrels of crude at a high price on a rolling-forwards basis.
A CFTC reclassification or clarification of the banks as speculators rather than (apparently) as thirsty oil-refineries would force the banks to disgorge 600+ million barrels, dropping the price of crude accordingly.
So Reid is technically correct. Assuming the Bill says what it ought to say, the price of oil would drop.
But President Bush accomplished a $14 drop with a single speech. An enlarged future supply is the real key to a lower price, not slapping the Banks’ pudgy, oil-stained fingers.
Congress CAN”T regulate speculators. All they can do is move it offshore.