CFTC Blames Oil Speculators For Price Spike

oil hands

This has been coming down the pike for a while, as the Commodity Futures Trading Commission has been making plenty of noise about taking a more anti-speculator stance than it did under the Bush administration.

Earlier this month, it was reported that the commission would try implementing curbs of some sort to limit the effect speculators could have on the oil market; and now they’re officially set to drop a report pointing the finger at speculators, blaming them for last year’s oil spike.

WSJ: In a contentious report last year, the main U.S. futures-market regulator pinned oil-price swings primarily on supply and demand. But that analysis was based on “deeply flawed data,” Bart Chilton, one of four CFTC commissioners, said in an interview Monday.

The CFTC’s new review, due to be released in August, adds fuel to a growing debate over financial investors who bet on the direction of commodities prices by buying contracts tied to indexes. These speculators have invested hundreds of billions of dollars in contracts that were once dominated by producers and consumers who sought to hedge against oil-market volatility.

So what was wrong with the CFTC’s data under the Bush administration? They’re not telling yet — only that they have it. Stay tuned…

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