Oil jumps more than $25 in one day and a chorus rises to 'stamp out speculators'. But are speculators at the core of the problem? And if so, would reducing speculation lower oil prices?
Economist David H. Wang argues that speculators "may in fact be boosting oil's price" and a partial solution may be to require commodity traders to deposit more money per futures contract, thus reducing the number of speculators. That should lead to smaller price moves for oil, he said.
However, Wang cautioned, that reduction in speculators will also lead to smaller price moves to the downside if and when oil's bearish fundamentals become the market's major concern.
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