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  • Speculating on Oil Regulation - Not the Most Effective Tool [View article]
    The US government can only regulate US trading, US traders, or US products (eg, WTI contracts) traded. It cannot, for example regulate trading abroad by non-US traders in Brent contracts. I suspect that the new UAE commodities market will benefit mightily from any US regulation on oil contracts traded here, without any material reduction in the price of oil. Remember a few weeks ago, when the government suspended contributions to the SPR? That was going to lower the price of crude too.
    And as to speculators, unless a pension or endowment fund wants to take physical delivery of a lot of barrels of oil, if they are long crude they will have to sell their position before the contract expiration. This should be a self-regulating mechanism.
    Jun 24 10:26 am |Rating: 0 0
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