Oil Rising? Scapegoat the Speculators!

Here we go again.  Crude oil futures are rising after their 2008 price collapse.  In the search for a politically incorrect bogeyman, pundits are pointing at those evil speculators.

Few of these pundits know the first thing about trading a physical commodity like crude oil.  If they did, they’d understand that speculators can’t manipulate the price of oil for an extended period without leaving obvious fingerprints in the form of expanded inventories.  For an explanation, see this piece I wrote last year “Defending the Rogues: Why Speculators Aren’t to Blame for High Oil Prices.”

Or we can all just blame “speculators.”  After all, they’re evil rich guys looking to profit off the misfortunes of others.

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