What drives oil prices?

Most experts think the volatility of oil prices has nothing to do with speculators pushing up prices by hoarding. Traders heap scorn on the US government’s Commodity Futures Trading Commission for scrutinising the role of those who buy up oil as an investment and do not need to use the commodity in their line of business. But CFTC officials are currently conducting hearings with industry players, and in the UK, the Financial Services Authority is taking a close look at the oil market.

The experts and analysts are most probably right. Plenty of things affect the oil price, not least supply and demand. Speculation is likely to cause only small swings in the market, most studies conclude. But on the other hand, the world of oil trading clearly brings in incredibly large rewards for the most skilled gamblers. As with the banks in the aftermath of the crash, it is worth at least finding how this high risk, high gains trading game was played and what role it had in creating the most spectacular price bubble of all.