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Senate Energy Panel Sees No Need for Immediate Hearing on Gas Prices

Senate Energy Panel Sees No Need for Immediate Hearing on Gas Prices

The Senate Energy and Natural Resources Committee does not see a need to hold an immediate hearing into natural gas prices in the wake of a Tuesday briefing with Commodity Futures Trading Commission (CFTC) staff officials who reported they have found no signs of manipulation in the market at this stage, said a spokeswoman for Committee Chairman Pete Domenici (R-NM).

The Senate panel instead will probably wait until sometime later in the spring (March-April) to hold a hearing into the overall gas market based on the favorable briefing from CFTC staff members and on the reports of the committee's own staff, Marnie Funk told NGI.

"There's nothing that tells us that we have to drop everything we're doing...and dash out and hold a hearing" into gas prices now, she said.

CFTC officials met with staff members of the Senate Energy and Agriculture committees Tuesday, during which they said that "at this point we don't see any evidence of manipulation" of gas futures prices, Funk noted.

They signaled that the rapid price run-up since late November "appeared to be the result of cold weather in an uncertain market," according to Funk. Large non-commercial traders held net short positions going into the winter (they were betting on gas futures prices to fall) based on bulging gas inventories, but they were forced to unwind the short positions when winter struck in November with a vengeance, driving up prices.

The CFTC staff members said, however, they were continuing their inquiry, and had subpoenaed gas futures traders' voice tapes, traders' books and records, and the records of hedge funds, Funk said.

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