"Policymakers . continue to display worrying ignorance about how futures prices are formed and...

"Policymakers ... continue to display worrying ignorance about how futures prices are formed and what they imply," says John Kemp. Anybody pointing at March 2012 oil being lower than March 2011 as reason the market believes the current spike is temporary knows not of what they speak.

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Comments (2)
  • kmi
    , contributor
    Comments (4684) | Send Message
    Thank you Mr. Kemp. That does not mean that policymakers are wrong in their associated concept that speculation is causing rapid and dramatic swings in commodity prices, just that using futures to support the idea is wrong.


    It's interesting to note that prices shot up on geopolitical news and in the absence of actual supply constraints, and that Bloomberg ran a story today showing money flowing out of EM and into Energy to take advantage of the swing trade. And that's what policymakers don't like. And your article does not debunk that.
    28 Feb 2011, 12:26 PM Reply Like
  • cbc
    , contributor
    Comments (411) | Send Message
    Fear and greed and market manipulation. What more do you need to know? Take advantage of it. The spikes have been big in both directions and temporary so far. Who is to say where we will go from here but there really is no geopolitical reason for any of it.
    28 Feb 2011, 08:34 PM Reply Like
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