Oil prices: Wall Street’s game

Big fund money is flowing into oil markets sending prices to levels never seen before. Is it profiteering or an essential way to ensure supply?

NEW YORK (CNNMoney.com) — There’s no question about it, a new breed of speculator is pouring money into the oil market and helping drive prices to record levels. What’s less certain is if this new money is essential to a healthy market.

Many blame record prices on Wall Street investors new to the oil market, saying they’re bidding up gas prices to artificially high levels – and soaking drivers.


As oil nears $130 a barrel, some say $10 to $70 of that price is due to Wall Street speculation.

But that’s not the whole story. Nearly everyone agrees that speculators have always been essential to a functioning market and that oil prices could be much higher without them.

What’s harder to understand – and widely debated among buyers and sellers of oil futures – is the effect new speculators flowing into commodities from big-money funds like university endowments, pensions and indexes are having on oil markets.

CNN