Speculating About Speculators

Recently, the Wall Street Journal opinion page had an op-ed piece concerning a recent report from the Commodity Futures Trading Commission which the author of the op-ed piece says conclusively proves that speculators had nothing to do with the rapid rise of oil during the summer. I found the CFTC report difficult to read. There's way too much technical language in there for me. However, the Executive Summary was easy to follow, especially where it says, "This preliminary survey is not able to accurately answer and quantify the amount of speculative trading occurring in the futures market." It goes on to explain that both commercial and noncommercial entities engage in hedging and speculative activity and that all gathered data classifies positions by entity and not by trading activity. So I'm curious how the WSJ was able to completely dismiss the effects of speculation based on a report that admits it's unable to address it.

There's an independent report (Note: You have to unzip the file and there are actually two PDF files) that was also released recently that claims speculators are driving up the prices of food and oil and goes on to explain in easy to understand language how.

So which do I believe? Given the administration's less than sterling record of being forthcoming with facts, the CFTC's obtuse report, and the government's lack of direct access to transaction data I have to say I place much less stock in their side. So unless presented with evidence showing otherwise, I continue to maintain that speculators had an adverse effect on the oil market this year.