Speculators influencing oil prices more than some thought

Yes, a speculator can obviously lose money but in a bull market the only sure loser is the end purchaser of the commodity. For this reason, regulators want to make sure that private parties and the speculation isn’t screwing the regular people too much.

This article shows how they failed. It seems Vitol had as much as 11% of oil contracts regulated by the New York Mercantile Exchange.

Naturally it’s becoming a political issue: “It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency’s laughable assertion that excessive speculation has not contributed to rising energy prices,” said Rep. John D. Dingell (D-Mich.). He added that it was “difficult to comprehend how the CFTC would allow a trader” to acquire such a large oil inventory “and not scrutinize this
position any sooner.”

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