Speculation and Oil Prices

On 17 April 2012, Obama Administration proposed new initiatives to strengthen oversight of energy markets.   

The President's plan call on Congress to:

•  Increase funding to increase the number of surveillance and enforcement staff charged with oversight of the oil futures market;
• Allow the Commodity Futures Trading Commission (CFTC) to upgrade the technology used to monitor the energy markets;
• Increase the civil and criminal penalties for those convicted of manipulating the oil futures market;
• Provide the CFTC with additional the authority to raise margin requirements in oil futures markets to limit disruptions in the oil market; and
• Expand access to CFTC data so that analysts can better understand trading trends in the oil markets.

Here are some initial reactions from economists on the impact of speculation as well as on the possible impact of Obama’s proposal on oil prices:

John Cochrane: http://johnhcochrane.blogspot.com/2012/04/speculation-and-gas-prices.html
Jim Hamilton:    http://www.econbrowser.com/archives/2012/04/a_ban_on_oil_sp.html
Scott Irwin:        http://www.farmdocdaily.illinois.edu/2012/04/speculation_and_gasoline_price.html
Lutz Kilian:         http://www.cnn.com/2012/04/19/opinion/kilian-oil-speculation/index.html
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                            http://www.voxeu.org/index.php?q=node/7892