From a Washington Post Article:
Airlines, among the biggest casualties of high oil prices, seem to believe that financial players are skewing the oil market. A dozen of the airlines have e-mailed their customers and frequent flyers to ask them to press Congress to regulate oil markets more closely to stifle “unchecked market speculation and manipulation.”
The e-mail sent by United Airlines said: “Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.”
For the entire article:
http://newsweek.washingtonpost.com/postglobal/energywire/2008/07/oils_weird_week.html
Richard Pace 