Stop slick traders
It is absolutely apt for Peter Jones (Perspective, 20 January) to consider how “oil price fall pumps up speculation”, while at the same time shedding a welcome light on the arcane subject of oil futures.
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.
Apparently 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.
Old Chapel Walk