CFTC Preliminary Report Subscribes to the Peak Oil Theory

A preliminary report by an Interagency Task Force for the CFTC (Commodities Futures Trading Commission) conclude that “current oil prices and the increase in oil prices between January 2003 and June 2006 are largely due to fundamental supply-demand factors”. Basically, the report subscibes to the peak oil theory. The report’s main thesis is surplus global capacity for crude oil is very tight, at 1.35 mm/bbl/day or less than 2% consumption. In addition, OECD oil stocks are down below 1996~2002 levels, making the market susceptible to real or perceived interruptions of supply.
However, the CFTC’s own commissioner, Bart Chilton, was quoted as saying “The simple fact remains that there is nearly US$250 billion in US commodity futures markets that wasn’t there just a few years ago, held primarily by non-traditional long investors. There has got to be, to some degree, impact from this significant new influx of trading.”

iStockAnalyst