Speculators may be driving up prices

Published: June 17, 2008, 10:42 pm

By KEVIN G. HALL WASHINGTON — Almost all the economists studying today’s high oil prices think that financial speculators are helping drive up those prices, but hard data is lacking as to whether they’re a factor, and if so, how big. Michael Greenberger said speculation is a major factor, and he knows a lot about the complex global oil market. He directed trading and markets for the Commodity Futures Trading Commission from 1997 to 1999. That body regulates the trading of contracts for future deliveries of commodities, including crude oil. The contracts, called futures, drive oil prices. Greenberger, a law professor at the University of Maryland, told McClatchy why he thinks financial speculation is driving up prices. How do speculators drive up oil prices? Speculators are able to drive up crude oil prices today because they’re allowed to trade in the U.S. in futures markets not overseen by U.S. regulators. Therefore, they are free to dominate these markets

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