Academic Study Sheds New Light on Oil Speculation Debate
| September 1st, 2009 | ||
| The research of Rice University’s Kenneth Medlock and Amy Myers Jaffe contends that oil speculation by financial institutions played a significant part in the 2008 commodity price swings. According to New York Times DealBook, the study deemed the models of the Commodities and Futures Trading Commission to be fundamentally flawed. Although they should have been looking at the increase in speculators driving upward price pressure in oil markets, they instead looked at increased volatility over a short time period. The study is surely bad news for energy traders such as Centaurus Advisors’ John Arnold, who insisted last month that cash settled trades, which do not take physical delivery of the underlying commodity, have no significant impact on oil prices. Gary Gensler, the Chairman of the CFTC, also recently overturned its initial hypothesis that speculators had no role in price swings. | ||
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Centaurus Advisors, LLC |
Related People: John D. Arnold
Related Entities: Centaurus Advisors;
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News
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