Why is it that market-worshipers claim fundamentals are responsible for equity prices, but speculators are to blame for Oil prices?
Bill King goes even further: "There is a fervid, global crusade, especially by politicians, to pin escalating oil prices on speculators."
On the other side of the argument, George Soros warns Speculators are largely responsible for driving crude prices to their peaks in recent weeks. And Germany has called for ban on oil speculation altogether. (See John Authors video here)
My own view is that speculators have contributed to the price to
some degree, but the tight supplies and freefalling dollar get more
This weekend, John Mauldin looked at a variety of factors impacting oil prices, and if you missed it over the long weekend, its worth a few minutes of your time.
Rather than adding to the noise, lets look at a few charts — both pro and con — that may reveal some insight as to the impact of speculators.
The Impact of Commodity Index on Spot Prices
Commodity Prices and the Weak Dollar
Not Widely Traded Commodities
This is only a brief survey, and I’m sure I missed some worthy links — please add related articles in comments . . .
The Short View: Commodity speculation
FT, May 20 2008 19:54
George Soros: rocketing oil price is a bubble
Telegraph, 12:53am BST 27/05/2008 http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnsoros126.xml
Germany in call for ban on oil speculation
Telegraph, 12:53am BST 27/05/2008 http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnoil126.xml
Whither the Price of Oil?
Thoughts from the Frontline, May 23, 2008
Masters Capital Management
Committee on Homeland Security and Governmental Affairs May 20, 2008
High Oil Prices Spur Thoughts About Bubbles,But This Might Be Misguided
WSJ, May 27, 2008;
Energy Watchdog Warns Of Oil-Production Crunch
WSJ, May 22, 2008;
Understanding crude oil prices
Econbrowser, May 24, 2008
Commodities Investment Bubble May Burst by Yearend, Lehman Says
Bloomberg, May 16, 2008
U.S. Consumer Sentiment Decreases to 28-Year Low
Bloomberg, May 16 2008