It is Jeff Korznik writing about the study economist Robert McCullough performed concerning the volatility in the crude oil market and the spike of July 3, 2008 and subsequent fall afterwards.
We cite:
In his final report McCullough examined the many events and announcements that had the potential to impact oil prices over this period. He found that fundamental factors of supply and demand were not statistically significant, but found (on page 13 of the pdf):
The proxy for the short-lived Commodity Markets Transparency and Accountability Act of 2008 was highly significant. Interestingly, this was the only variable that would have affected excess speculation as opposed to supply and demand fundamentals…. One conclusion to be drawn from these statistics is that the news stories cited by pundits to explain the dramatic spike in oil prices have little or no explanatory power.
In other words, the prospect of regulation of the futures markets had a statistically significant impact on prices. Let’s fast forward to the steep drop in crude this month. While there’s certainly been negative news on the economy, we had some negative news at various points while oil doubled from February. It is at least worth noting that the recent drop in oil coincided with a period in which Washington is seriously considering constraints on excess speculation in the energy markets.
We cite:
In his final report McCullough examined the many events and announcements that had the potential to impact oil prices over this period. He found that fundamental factors of supply and demand were not statistically significant, but found (on page 13 of the pdf):
The proxy for the short-lived Commodity Markets Transparency and Accountability Act of 2008 was highly significant. Interestingly, this was the only variable that would have affected excess speculation as opposed to supply and demand fundamentals…. One conclusion to be drawn from these statistics is that the news stories cited by pundits to explain the dramatic spike in oil prices have little or no explanatory power.
In other words, the prospect of regulation of the futures markets had a statistically significant impact on prices. Let’s fast forward to the steep drop in crude this month. While there’s certainly been negative news on the economy, we had some negative news at various points while oil doubled from February. It is at least worth noting that the recent drop in oil coincided with a period in which Washington is seriously considering constraints on excess speculation in the energy markets.
What really interest us, is this:
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