Supply and demand? Not the dark forces of conspiracy and market manipulation?
From the Washington Post, “Speculators Did Not Raise Oil Prices, Regulator Says“:
A federal regulator said yesterday that market speculators probably were not responsible for recent increases in the price of oil, contrary to the assertions of some experts and members of Congress.
Walter Lukken, acting chairman of the Commodity Futures Trading Commission, said in congressional testimony that commodity index traders and swap dealers, who trade on behalf of others, reduced their activity in the crude oil market during the first six months of the year.
Although the value of oil contracts on U.S. markets soared, Lukken said that was because prices surged. At the same time, the number of contracts held by investors who expected prices to increase — known as net long positions — fell 11 percent from Dec. 31 to June 30. Overall, investors in commodity indexes accounted for 13 percent of New York Mercantile Exchange crude oil trading, he said.
Lukken’s testimony before the House Agriculture Committee is available here.
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