Saturday, August 20, 2011

Leaked Oil Trading Documents Underscore Role of Speculators in Oil Price Spikes; Identities of Traders Should Be Public

WASHINGTON - August 19 - Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.

The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things.

First, the data reveals that excessive speculation by banks and others is the driving force in oil markets, pushing prices beyond the supply-demand fundamentals. Who wins when prices rise? Wall Street traders that are engaged in speculating. Who loses? Every consumer who fills up at the pump.

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