United States federal regulators said yesterday they will place stricter limits on foreign exchanges that trade US oil as concerns continue to grow about the role of speculation in rising fuel prices.

Some lawmakers said the move was long overdue.

The Commodity Futures Trading Commission said it will require the London-based ICE Futures Europe exchange to adopt position limits used in the US for the trading of the West Texas Intermediary crude-oil contract, which is linked to a similar contract on the New York Mercantile Exchange.

Share daily trading data

Under the new agreement, foreign officials also will share daily trading data with US authorities and report violations when they are uncovered. Previously, the groups shared data on a weekly basis.

Atlanta-based Intercontinental Exchange Inc., parent company of ICE Futures Europe, plans to comply with the new rules and said the CFTC action would have almost no impact on its customers or business.

Lawmakers, who are increasingly are blaming speculation by index funds and other large investors for artificially boosting the prices of oil, corn and other commodities, greeted the CFTC announcement with scepticism at a hearing to assess the agency's performance.

"Why didn't we do this nine to 10 months ago when things first appeared to be moving faster than usual?" asked Democratic Senator Ben Nelson.

"The sense of urgency on the street seems to be different from the sense of the bureaucracy. We need to match that urgency."

Sweet crude up

Light, sweet crude for July delivery was trading near $134 a barrel on the Nymex Tuesday afternoon, up nearly 35 per cent since the beginning of the year.

CFTC acting Chairman Walter Lukken previously had told Congress oil prices appeared to reflect market fundamentals. He pointed to the declining value of the dollar and rising demand in developing nations as a major factor behind the multiyear ascent in oil prices.

But in the past month the agency has taken a flurry of actions to gather more data on unregulated trading, including over-the-counter swaps.

Considering the limited view the CFTC has of the futures market, Democratic Senator Byron Dorgan questioned whether regulators know enough about the markets to gauge the effect of speculation.