The CFTC Wants Limits on Oil Price "Speculators"

This is huge news.  The Commodities Futures Trading Commission, our main futures market regulator, has given notice that it is considering "position limits" on oil futures to stop the effect of "speculators" in the oil futures markets.  This signal that the CFTC agrees in principle with the notion that recent price volatility in the oil futures market is due to speculation untied to fundamental values.  There are two questions:  First the value of speculative traders to a market and, second, assuming the first answer to be negative, whether regulation will work.  How does one regulate traders that set up overseas on overseas markets that do not have trading limits?  Only an international authority will do, Pope Benedict's solution.