Francis Schutte

Speculators Driving Up Commodity Prices? Hardly

A lot of people find it extremely hard to understand the commodity markets are physical markets. Anybody buying a Copper contract, has either to sell it before the expiration date of the contract, or has to take delivery of the goods. For copper bars, I can understand and have known people taking delivery. However, I don't see anybody take delivery of an Oil contract. Assuming somebody would, one would need to have the proper infrastructure to do so. Hence speculators can only play a limited role.