Have Oil Speculators Already Priced In War With Iran?
By Matthew Philips on March 07, 2012


The last time the price of Brent crude closed below $100 a barrel was
Oct. 6, 2011. It’s since gone up nearly 30 percent, to a high of $126.20
on March 1. Tensions over Iran’s nuclear program have people spooked
that a potential attack would disrupt the country’s 2.2 million barrels
of daily oil exports. And so money has been pouring into oil futures
contracts, driving up the price without any significant change in the
underlying supply-and-demand fundamentals. Only the threat of one.

So who’s buying?

Talk to oil analysts these days and chances are they’ll tell you that
more than half the spike in the oil price is due to
speculators—specifically noncommercial users. That’s jargon for
investors who are buying up futures contracts not because they intend to
use the oil, but because they think it’s a good investment. These aren’t
airlines or refining companies; these are money managers betting that
the price will go up. And so far they’ve been right, thanks to themselves.

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And we should allow oil speculating assholes to control our economy?