During last summer’s witch hunt for oil speculators, Carl Levin, Democrat from Michigan, claimed that it was easier to speculate on oil using London’s exchanges.
Levin wanted the United States to become the world’s cop for oil, so that it could cut back on speculation.
New data from the CFTC disproves Levin’s theory. Oil trading on the United States’ exchanges has more speculation it turns out:
Financial Times: The data published by the CFTC reveal for the first time positions of speculators and other market participants on the West Texas Intermediate oil market at the New York Mercantile Exchange and the London-based ICE Europe Futures.
The data show the share of speculators betting oil prices will rise as a percentage of the market was last week 18.3 per cent in New York, but 9.6 per cent in London. The percentage of traders taking “spread” positions – popular among hedge funds betting on relative price performance of two futures contracts – was also smaller in London, at 14.7 per cent, than in New York, at 22.7 per cent.
Share of commercial users, such as oil companies or consumers, was far larger in London than in New York, the data published last week show.
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