Are speculators responsible for the rally?

Oil’s rally to records well above $145 a barrel has stirred a heated debate about the role played by speculators in commodity markets. From the outset, oil futures markets have included participants unrelated to physical crude, but a rising tide of money from investors, chiefly pension funds, has fuelled arguments the market has been distorted. The biggest producer countries, led by Saudi Arabia, which tend to favour fixed pricing, have blamed speculation for the extent of a rally that has seen oil prices double over the last 12 months. Politicians from consumer countries have said the problems are fundamental and have called for more oil and investment to ease what they see as short and longer term supply problems. “There's no evidence we can find that speculators are driving futures prices,” said Sam Bodman, US energy... [read full story]