A chance to rein in speculative investments that could be pushing up energy prices appears to be fading in Washington.</p><p>The Commodity Futures Trading Commission held hearings in the summer on limiting the investments in commodity index funds, and the Obama administration’s choice to lead the commission was in favor of following through.</p><p>But the new chairman, Gary Gensler, needs two others on the five-member commission to join him, and this no longer appears likely.</p><p>“They have run into roadblocks,” said Tyson Slocum, head of the energy project at the consumer group Public Citizen, who testified at the hearings. “It’s disappointing.”</p><p>The index funds buy and sell huge numbers of contracts for future delivery of commodities, mainly oil. This allows investors to benefit from rising commodity prices without ever having to take possession of the commodities. </p><p>But the funds also pump billions of dollars into the commodity markets, which consumer groups and several energy-dependent industries said inflated oil and gasoline prices.</p><p>The funds have soared in popularity, including with pension funds such as the Missouri State Employees’ Retirement System. Officials of the Missouri fund note that their commodity investments, though volatile, have made a good return overall and at times have offset losses on stocks.</p><p>Gensler, a former Goldman Sachs executive, in a speech in late October reiterated his interest in putting limits on the funds’ trading. Another commissioner, Bart Chilton, in public statements also appeared to support trading limits. </p><p>But that’s where the likely “yes” votes stop on the commission, which must include at least two Republicans. </p><p>Michael Dunn, a Bush administration appointee, hasn’t made his feelings on the issue known. Jill Sommers, recently reappointed by President Barack Obama, was formerly policy director for the International Swaps and Derivatives Association, a trade group for highly leveraged investments. </p><p>The newest Obama appointee, Scott O’Malia, has worked in energy trading and for a decade was the senior legislative assistant to Sen. Mitch McConnell, the Republican Senate leader.</p><p>There also are proposals in Congress that would limit the trading, but they haven’t gone anywhere.</p><p>Energy speculators and the commodity index funds took heat last year when gasoline reached $4 a gallon and oil prices spiked above $140 a barrel. Although prices then collapsed, they have risen again.</p><p>Gasoline nationally is averaging $2.69, the highest in more than a year. Crude oil has climbed from $33.98 at the beginning of the year to $79.62 on Thursday. </p><p>The last time supplies were this high — a decade ago — oil was around $10 a barrel. </p><p>“There’s nothing in supply and demand that justifies prices going up this much,” said James Williams, an energy analyst for WTRG Economics.</p><p>Williams blames the index funds for at least part of the rise. Others disagree, including the owners of the New York Mercantile Exchange, where most energy futures are traded. The exchange released a study that said the futures investments help because they add liquidity to the market.</p><p>But many energy sensitive industries, including the airlines, are with Williams. When oil prices go up a $1 a barrel, the airlines say, their annual fuel expenses rise $430 million.</p><p>Dave Castelveter, a spokesman for the Air Transport Association, says speculation is at least parly to blame.</p><p>And he adds that besides hurting his industry, “It affects every American every time they visit the gas pump.”</p><p>The last time supplies were this high — a decade ago — oil was around $10 a barrel. </p><p>“There’s nothing in supply and demand that justifies prices going up this much,” said James Williams, an energy analyst for WTRG Economics.</p><p>Williams blames the index funds for at least part of the rise. Others disagree, including the owners of the New York Mercantile Exchange, where most energy futures are traded. The exchange released a study that said the futures investments help because they add liquidity to the market.</p><p>But many energy sensitive industries, including the airlines, are with Williams. When oil prices go up a $1 a barrel, the airlines say, their annual fuel expenses rise $430 million.</p><p>Dave Castelveter, a spokesman for the Air Transport Association, says speculation is at least parly to blame.</p><p>And he adds that besides hurting his industry, “It affects every American every time they visit the gas pump.”</p><p>To reach Steve Everly, call 816-234-4455 or send e-mail to <a href="mailto:severly@kcstar.com">severly@kcstar.com</a>.