Japan to strengthen monitoring of speculative money on oil market

Sunday 11th May, 03:13 AM JST

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5 Comments

umbrella at 01:12 PM JST - 11th May

This speculative oil market makes money for a few but just pushes up the price of everything for the rest of us. Shouldn't be allowed. The answer is to ban the futures trading in oil. Only the spot market to be allowed. Thus if you buy oil you take actual physical delivery and if you sell oil you actually have to deiver it to the buyer. Just watch the price tumble from $126 a barrel to a more realistic, in tune with demand and supply, $50 a barrel. But just watch the fat cat money men howl!
MPLS2 at 06:16 PM JST - 11th May

If all of the G8 countries do their part, then it'd have a better chance of suceeding, would it not?
kwv889j at 11:45 PM JST - 11th May

Making the oil market more transparent would be a good thing. The oil markets are influenced by a great number of factors. While monitoring speculators is necessary, speculators by themselves are just a small part of a big, complex market. Supply and demand and politics probably play a bigger role than speculators in setting energy prices. The political factor, in particular, is becoming more important. In recent years, oil production has been increasingly nationalized, making the oil markets more sensitive to political issues. The recent tension between Venezuela and Colombia, which caused the oil price spike of the last few days, is an example.
frontandcentre at 11:17 AM JST - 12th May

umbrella - banning oil futures trading would hurt fuel consumers as well as speculators, because they are a hedging tool as well as a speculating one. It's wrong to say that futures trading inevitably causes prices to rise, just look at the whining there's been recently about speculators shorting the stocks of various banks. It cuts both ways. Besides, in every futures deal, there's a counterparty who is effectively betting the opposite way.

In actual fact, this is a supply-demand issue (i.e. there's insufficient oil supply to meet growing demand) and if you feel under pressure from oil prices, hedge your consumption by buying oil stocks or futures. Then you are doing exactly what big companies do. Alternatively, you could try complaining to OPEC but they aren't too likely to listen.

Governments love to blame speculators when energy consumption - and government policies which help to govern it - have far more real impact on the market
Wakarimasen at 01:48 PM JST - 12th May

typical Japanese response of imposing heavy handed and senseless regulation in a situation where they will never be able to assert any control. Consumption exceeding production is the problem here.

Japan has enough mindless regualtion that stifles its economy and makes it a pain to run any kind of business here. Bureaucrats rule supreme!!!!