Monday, March 11, 2013

Why funds are allowed to speculate on oil?

I've all along suspected that the fluctuations of the oil prices have to do with speculators who are not in the least interested in using the oil for business purposes. Recently I read an article that confirms my suspicion.  A managing partner at IAF Advisers, said sudden shifts in prices sometimes surface when the front-month futures contract expires, as was the case with the expiration of the March WTI oil futures contract."At expiration, funds need to get out."

My question is why are funds allowed to speculate on commodities that are the lifeline of the economy. Just imagine. If someone is to speculate on the price of the MRT/bus fares, driving it up and down depending on their own likes/dislikes, how would you feel?

Certain boundaries should not be crossed, no matter the price.

No comments:

Visit Rhinestic's Knick Knacks @ Etsy for handmade goods and supplies!

Related Posts Plugin for WordPress, Blogger...