Bank and investor exodus worsened oil rout, traders say

The role of financial trading in the recent collapse of crude oil has added a new twist to the old debate over the impact of speculation on commodity markets. Did retreating index investors, short-selling momentum traders and risk-averse banks exacerbate the price drop?

Energy Risk November 2012 - Special report - Oil
Oil price drop revives long-standing debate over impact of speculation in commodity derivatives

The collapse of the oil market in late 2014 and early 2015 has had many predictable consequences: cheaper prices at the pump; pain for oil-exporting countries such as Iran, Russia and Venezuela; and a growing bonanza of deal-making as private equity firms snap up distressed oil producers.

But perhaps one surprising effect has been a revival of the long-standing debate over the impact of speculation in commodity derivatives. As in 2008, when skyrocketing prices caused widespread public criticism

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