The US government has announced that they will start clamping down on Oil future traders who don’t actually use oil as a main component of their daily operations. These are mainly the banks and other investment funds. The US had already announced that they were going after the culprits responsible for artificially inflating the price of oil.
Some of the proposals that cropped up on how to prevent speculation in oil futures trading were to set stricter limits on the amount of contracts people are allowed to trade, increasing the amount of their own money that they have to put up to buy the contracts, as well as better reporting on who is buying what.
Lobby groups funded by Airline and other transportation companies are also pressuring the government to put a stop to oil speculation because they are the industries that greatly suffer from the high price of oil.
Ken Medlock, energy economist of James A. Baker III Institute for Public Policy believes that added restrictions will help bring down the price of oil. He said that there is too much of a correlation between stock prices, the dollar and oil prices to think big investment money - as opposed to supply and demand - is not driving the price.
This site has long believed that Oil speculators are responsible for the high price of oil in the world market.
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Category: Oil, Oil Price
