Pigs at the Trough

Last month crude oil prices reached a record level of  $147 per barrel . While some of this price increase could be attributed to increase in demand for oil in Asia and reduction in oil production, most of it was due to speculation.

If the price increase is due to a supply demand mismatch, the price remains fairly stable. However, speculation can result in significant fluctuations in prices. The end user suffers, while the speculators pocket the profits.

This entry was posted on Friday, August 8th, 2008 at 2:54 pm and is filed under oil prices, speculation, war. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.