Who Is in the Futures Markets and How It Has Changed
Who is in the Futures Market and How Has It Changed?
Dec. 29
Who is in the Futures Market and How Has It Changed?
A summary report of a study by James A. Baker III Institute for Public Policy Rice University.
Office of OPEC Governor For enquires kindly contact Sammy AL Mehaid Sammy.mehaid@aramco.com
1
Who is in the Futures Market and How Has It Changed?
Dec. 29
Introduction:
Leading up to 2008, oil prices experienced a steady, upward trend. Then, in 2008 oil prices climbed to unprecedented highs of $147 per barrel in July, only to fall dramatically in a very short period of time to a low of $30 per barrel in December 2008. This relatively dramatic movement in oil price has caused everyone from U.S. congressmen to ministers from the Organization of OPEC to call into question the role of speculative traders in oil futures market. As such the commodity futures trading commission (CFTC), the main regulator of U.S. oil futures markets, recently announced that a new review of the role of speculators in oil futures markets trading would be forthcoming. The Obama administration has already indicated that it will pursue greater regulation of market and is negotiating with the United Kingdom about possible coordination. The brief paper investigates and addresses the core question of whether speculative trading in oil has increased and whether the link between dollar and oil-related financial contracts has strengthened in the last several years. Finally, the paper discuses the interaction between these observed market trend regarding policies to use strategic government-held oil stocks.
I.
Crude oil Price: the paper discuss that it has been postulated that oil linked index funds became an asset class for investors wanting to escape the falling dollar and weakening stock market, adding to the speculative fervor in oil and causing even more damage to the U.S. economy. In 2008, U.S. oil imports totaled $331 billion. This represents an increase of 300
Dec. 29
Who is in the Futures Market and How Has It Changed?
A summary report of a study by James A. Baker III Institute for Public Policy Rice University.
Office of OPEC Governor For enquires kindly contact Sammy AL Mehaid Sammy.mehaid@aramco.com
1
Who is in the Futures Market and How Has It Changed?
Dec. 29
Introduction:
Leading up to 2008, oil prices experienced a steady, upward trend. Then, in 2008 oil prices climbed to unprecedented highs of $147 per barrel in July, only to fall dramatically in a very short period of time to a low of $30 per barrel in December 2008. This relatively dramatic movement in oil price has caused everyone from U.S. congressmen to ministers from the Organization of OPEC to call into question the role of speculative traders in oil futures market. As such the commodity futures trading commission (CFTC), the main regulator of U.S. oil futures markets, recently announced that a new review of the role of speculators in oil futures markets trading would be forthcoming. The Obama administration has already indicated that it will pursue greater regulation of market and is negotiating with the United Kingdom about possible coordination. The brief paper investigates and addresses the core question of whether speculative trading in oil has increased and whether the link between dollar and oil-related financial contracts has strengthened in the last several years. Finally, the paper discuses the interaction between these observed market trend regarding policies to use strategic government-held oil stocks.
I.
Crude oil Price: the paper discuss that it has been postulated that oil linked index funds became an asset class for investors wanting to escape the falling dollar and weakening stock market, adding to the speculative fervor in oil and causing even more damage to the U.S. economy. In 2008, U.S. oil imports totaled $331 billion. This represents an increase of 300