Study blames speculation for oil's rise

Study blames speculation for oil's rise

Investors put $60B into oil futures during the first five months of the year as prices jumped as high as $145 by July, since then withdrew $39B.

WASHINGTON (AP) -- Speculation by large investors -- and not supply and demand for oil -- were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday.

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July.

Since then, these investors have withdrawn $39 billion from those markets as prices have retreated dramatically, the report said. Oil traded at just under $1.02 a barrel Wednesday on the New York Mercantile Exchange.

"We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down," said Michael Masters of Masters Capital Management, calling the amount of money moving into oil futures markets by large institutional investors in the early part of the year "way off the scale."

Masters said its analysis shows investors "began a massive stampede for the exits" on July 15 and that this caused the price decline.

http://money.cnn.com/2008/09/10/news/economy/oil.ap/index.htm?cnn=yes

I have have no doubt at all this was the biggest problem with the high prices. It all boils down to "GREED"!!!!!

If congress does not put strict regulations on speculators, it will happen again! Congress has the power, if not now, then after January, and they MUST put a stop to what has been going on with the speculators.