U.S. commodities regulators, in an effort to crack down on excessive speculation, plan to propose sweeping trading limits on oil, natural gas and possibly other commodities.

U.S. Commodity Futures Trading Commission Chairman Gary Gensler said Tuesday the agency will hold hearings this summer to consider imposing position limits for "all commodities of finite supply." The agency will also review whether swap dealers, index traders and exchange-traded fund managers should be allowed to get around those limits through special hedge exemptions.

"My firm belief is that we must aggressively use all existing authorities to ensure market integrity," Gensler said.

If the CFTC ultimately decides to set limits across energy and other commodities, it would be a major change from the current policy, which hands off much of that authority to the exchanges.

Currently, the CFTC imposes limits on certain agricultural products and allows the exchanges to set limits on such other commodities as energy and metals in order to protect against manipulation.

While futures exchanges do subject traders to accountability levels, which trigger additional oversight if exceeded, those traders are not subject to position limits unless it's during the last few days of trading before a contract's expiration. Exchanges are not required to set limits to protect against excessive speculation.

Gensler also said the agency is in the process of drastically altering how it presents information to the public in its weekly large trader report by incorporating data about swap dealers, foreign contracts tied to U.S. futures contracts, professionally managed market positions such as hedge funds, and certain contracts that help set market prices.

Such a change would be a departure from the current format of the reports, which only classify large traders as hedgers or speculators and make it difficult to get a true picture of the marketplace. Many large derivative dealers, such as Goldman Sachs (GS) or Morgan Stanley (MS), may declare themselves as hedgers even if their trading strategies combine price risk management and speculation.

The decision to reconsider position limits and hedge exemptions reflects a different attitude than the one that CFTC displayed last summer when oil and agricultural commodities spiked to all-time highs.

Some lawmakers believed the price spikes were tied to excessive speculation by swap dealers and index traders, and they criticized the agency for failing to take forceful action.

Much to some Democrats' chagrin, the CFTC - operating at the time under Bush administration leadership - instead issued two reports saying it had no definitive evidence that excessive speculation caused prices to rise to such high levels.

But on Tuesday, many of those same Democrats expressed optimism that the CFTC has changed its mindset.

"Such action is long overdue and essential to stopping the excess speculation in our commodity markets," said Sen. Byron Dorgan, D-N.D., who added that the agency also must immediately "limit or revoke" many of the exemptions granted over the years to speculators.

Some of the hearings this summer will focus on those exemptions and also discuss in more detail a proposal the CFTC issued earlier this year which would tighten the rules for how swap dealers receive hedge exemptions.

"The different regulatory approach to position limits for agriculture and other physical commodities deserves a thoughtful review," Gensler said, noting that the agency will consider how to apply position limits fairly for all market participants, including "index traders and managers of exchange-traded funds."

H. Peter Haveles Jr., a Kaye Scholer LLP lawyer specializing in financial markets, said the proposal takes position limits "a step further as a tool to control price volatility."

"Now it's to regulate price movement and price volatility as opposed to making sure there is no misconduct in the marketplace," Haveles said.

Although some Democrats on Tuesday appeared thrilled by the CFTC's plans, market reaction was a bit more guarded.

"Having speculative position limits on deliverable futures is very sensible. But like anything, the devil's in the details," said Michael Cosgrove, New York-based head of commodities for brokerage GFI Group Inc. "If you're allowed to have 10 lots , then the effect on energy markets will be incalculably destructive."

A spokeswoman for CME Group Inc. (CME), which operates the New York Mercantile Exchange, said the company is reviewing the proposal but had no further comment. Representatives from the Intercontinental Exchange (ICE), which offers electronic energy trading, couldn't immediately be reached for comment.

ICE shares were recently down about 10% at $98.97 in a broad market downturn. CME shares were down about 5% at $283.24.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com

(Gregory Meyer contributed to this article).