Congress Needs to Unravel Role of Speculation in Price of Oil

Summary

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A private-sector analysis of this year's volatility in oil prices won't surprise many American consumers. It is remarkable, however, that its findings directly contradicted conclusions by the federal agency that oversees commodities trading, including in oil futures.

The new study by Masters Capital Management, a large investment firm, found that speculation by some of the largest institutional investors, rather than simple supply and demand fluctuations, drove oil to $145 a barrel by mid summer and also prompted its retreat recently to just over $100 a barrel. From January through May, large institutional investors put $60 billion into oil futures, and have since withdrawn about $39 billion.

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Extract

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Congress Needs to Unravel Role of Speculation in Price of Oil

The Commodities Futures Trading Commission has advised members of congressi...

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