Academic battle rages over oil speculation, high prices and volatility

In spite of attempts to impose commodity position limits in Europe and the US, a fierce battle continues to rage over whether speculation in oil is responsible for high prices and volatility. David Wigan reviews some of the arguments

The controversy over the impact of speculative investment in oil has much in common with trench warfare. Both involve prolonged conflict between two sides that are deeply rooted in their respective positions and remain immovable amid a barrage of constant attack. And although the debate on speculation in oil might lack the intensity of a real war, the level of emotion stirred up by it often seems comparable.

While numerous academics have put forward statistical and econometric theories for the