Stop slick traders
However, one wonders to what extent hedging against price volatility smooths it out or exacerbates it.
Take for instance a certain kind of gambling game in which speculators bet against oil prices.
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Hide AdApparently there could be many times over more “paper barrels of oil” than the real stuff.
Surely the North Sea oil industry isn’t becoming just a bubble on a whirlwind of speculation.
Also, a complication is the foreign exchange rate as oil is traded mainly in US dollars.
Such a strategic resource is too valuable for the global economy to be open to market speculation.
Arguably a case could be made for the World Trade Organisation and the International Monetary Fund looking critically at the way oil is traded.
Ellis Thorpe
Old Chapel Walk
Inverurie