Hey there, time traveller!
This article was published 24/6/2008 (3165 days ago), so information in it may no longer be current.
In today's Financial Post
there is a fascinating story
describing testimony by senior oil industry analysts at Congressional hearings into spiking oil prices. The four fellows highlighted in the FP story all encouraged Congress to curb crude oil speculators to bring down oil prices. If done quickly, the analysts believe oil would come down to the US$65 a barrel range. "I believe, based on supply and demand fundamentals, crude oil should not be abbove US$60 per barrel," said Fadel Gheit of Oppenheimer and Company. "There is no reason to think that tighter regulation would do any harm to anyone but the speculators."The only dissenting opinion in this story comes from one of those specualtors, Phil Flynn, vice president of energies at Alaron Trading, who said any curb on speculation would only have a temporary impact. Flynn also said government intervention was unwise because "the fundamentals are sound" in the oil market.So, we have experts in the oil industry crossing swords with each claiming that market principles or fundamentals back up their positions. There is probably room for disagreement here, given the complexity of commodity markets and the tenuous nature of global political events. However, regardless of which position is the more genuinely fundamental, it's hard not to conclude that the harm being done to the world right now outweighs the good done for market speculators.Read and hear more on the congressional testimony here