Federal Officials Examine Role Of Oil Speculators
NEW YORK (WCBS 880) – Federal officials are investigating what part oil speculators may play in the skyrocketing price of oil.
LISTEN: WCBS 880's Sean Adams reports on oil speculators
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Regulators say it's not just supply and demand, and it's not only attributable to world events like the crisis in Libya, but oil speculation.
Everyday investors—big and small—trade contracts for future oil shipments, and even though they don't intend to use the oil themselves, they're hedging their bets that the price will go up.
"Their concern is not whether or not crude oil is going to $110 or $105 today or tomorrow," Bart Shelton, commissioner for the Commodities Future Trading Commission, said. "Their bet is that crude oil will be worth $115 or $120 in two years."
The commission is considering some restrictions to reign in oil speculators and to limit how much of the market they can control.
Still, a certain amount of speculation is good for the commodities market, Shelton said. Regulators want to keep it in check.
"We can institute as Congress has directed us to do position limits—that is a limit on the amount of speculation that can occur for an individual trader," he said.
