Rush of investors to oil costly for all

The surge of mainstream investors into commodities is driving record crude prices – and we’re all feeling the pain.

NEW YORK (CNN) — The economy is stumbling, energy supplies are rising, yet oil prices are hitting new records. What’s going on here?

Oil’s surge to an all-time high of nearly $104 a barrel Monday is the latest evidence that speculative investment flows are driving crude prices more than physical supply and demand for the commodity.


“This has gone beyond reason,” said George Littell, an analyst with Groppe, Long and Littell in Houston. He believes oil should be trading in the range of $60 a barrel.

“An awful lot of people with money who don’t think much of other financial assets, they want to own commodities instead,” said Littell, who has been tracking the energy business since 1966.

CNN