Speculation and Recent Volatility in the Price of Oil

  title={Speculation and Recent Volatility in the Price of Oil},
  author={James Thomas Einloth},
  journal={Agricultural \& Natural Resource Economics eJournal},
  • J. Einloth
  • Published 1 August 2009
  • Economics
  • Agricultural & Natural Resource Economics eJournal
As the price of crude oil doubled from June 2007 to June 2008, suspicion grew that price was being driven higher by speculation rather than fundamental supply and demand. After having seen the price drop 70 percent from its peak, this explanation may appear more plausible than ever. This paper introduces a new methodology that uses convenience yield – imputed from futures prices – to detect the influence of speculation on the spot price of a storable commodity. The paper finds the evidence… 

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