Speculators Didn't Do It

Traders take blame for high oil prices, but global demand is the real culprit
By Kevin Spak,  Newser Staff
Posted Jul 5, 2008 7:21 PM CDT
Traders work the crude oil options pit at the New York Mercantile Exchange, Thursday, July 3, 2008 in New York.    (AP Photo)
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(Newser) – Politicians are blaming high oil prices on an old scapegoat: speculators, writes Dean Barnett in the Weekly Standard. But if speculators were hoarding oil, it would be stockpiled, and inventories would soar. Instead, inventories remain constant. This is obvious "to anyone who took an introductory economics class," Barnett writes. "Demand is relatively high. That means higher prices."

Robert Samuelson agrees in Newsweek, saying the global economy has pushed prices. What's more, speculators "often don't fit the stereotype of sleazy high rollers: many manage pension funds or university and foundation endowments," Samuelson writes. Their trading in in futures markets is "not the main problem,” he concludes. “Physical scarcities are.” (Read more oil price stories.)