Speculation Not Driving Oil Prices: Economic Fundamentals Remain Key Factors.
The surge in oil prices from 2003-08 was not mainly due to speculation in oil markets, as commonly believed. Research shows that the rise in prices was driven by economic factors, not financial speculation. Different methods used to study this issue all point to the same conclusion: speculation did not play a significant role in determining oil prices. Instead, the connection between spot and futures prices is more likely due to shared economic fundamentals, rather than financialization of oil markets.