Eight senators urged the Commodity Futures Trading Commission yesterday to "aggressively" limit trading of energy and other commodity derivatives as required by the financial reform bill passed last year.

The lawmakers expressed concern in a letter that the commission may not impose strong enough limits to curb speculation that they fear would cause oil, food and other commodity prices to rise beyond supply and demand would dictate. CFTC is considering rules to set such "position limits" on energy, metal and agriculture derivatives traded outside of regulated exchanges -- known as "over the counter" markets.

"By directing the commission to establish aggregate limits on the positions held by any group or class of traders, Congress intended for the commission to act aggressively to prevent the harmful and damaging effects of excessive, broad-based speculation in commodity markets," the senators wrote.

"The growing role of hedge funds, financial traders, and long-term passive investors in energy and other commodity markets has had devastating consequences for the average American. These speculators have contributed to rising volatility and periodic price spikes in the cost of gasoline and food. ... It is critical that the Commodity Futures Trading Commission fully execute these changes," they wrote.

Signing the letter were Sens. Bill Nelson (D-Fla.), Maria Cantwell (D-Wash.), Carl Levin (D-Mich.), Robert Menendez (D-N.J.), Patty Murray (D-Wash.), Bernie Sanders (I-Vt.), Sheldon Whitehouse (D-R.I.) and Ron Wyden (D-Ore.).

CFTC has already said it cannot meet the law's Jan. 17 deadline for setting "position limits" on derivative traders at a level that would not allow any one trader to possess enough contracts to force prices to rise or fall. But CFTC is divided about the level of the limits and say they do not yet have enough data about the $583 trillion global over-the-counter derivatives market to make a decision by the bill's deadline.

The commission voted today to allow 60-days of public comment on a proposed position limit rule, although there is some disagreement among the commission members about the rule. The proposed rule would set position caps on certain futures contracts now but develop limits for a broader range of contracts as the agency gets more data.

Many fear oil and energy commodity prices are now starting to climb in a period of speculation similar to the 2008 commodity bubble that resulted in oil reaching a record $145 per barrel in the summer that six months later bottomed out at $30 per barrel. Crude oil is currently trading above $90 per barrel.