Topic: News – Speculators don't cause oil price swings -JPMorgan – Forbes
NEW YORK (Reuters) – Over 90 percent of the market swings in oil since 2006 were due to supply shocks, not price speculation, JPMorgan said Wednesday in a study that questions tough market curbs proposed on commodity investors. Commodity Futures Trading Commission, who blame speculators for such volatility, have proposed tough rules that will limit the number of futures contracts that hedge funds, investment banks and other noncommercial investors can control in markets like oil and grains. Barclays ( BCS – news – people ) Capital , another commodities powerhouse, have studied that data and concluded that speculators have little to do with the price moves in at least oil, if not other commodities. JPM said its analysis showed most of the oil market volatility over the last three years was closely related to inventories of crude oil and movements in the U. It said 96 percent of the variance in weekly oil prices between 2006 and 2009 was due to inventory shocks that occurred when crude stockpiles suddenly tightened or relaxed. read more