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Old 07-04-08, 05:37 PM   #2 (permalink)
Gladiator
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Thread Starter Re: True Oil Speculation

"Bashing futures traders may well be good politics, but it's stupid public policy. By providing a mechanism for locking in prices, the futures market makes it easier for oil companies to make costly investments in new production - which is the key to lowering prices at the pump.

Futures trading also discourages hoarding in an otherwise tight market. Without speculators willing to take the other side of so many futures contracts, oil refiners and other end-users might be inclined to ramp up their spot-market purchases and store more oil as a hedge against further price increases. "

In defense of oil 'speculators' - Jun. 27, 2008


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