1. Yes, I think oil speculators can be responsible for large price hikes in the price of oil, especially when all other factors are held constant. On the other hand, they could also cause prices to fall. They can cause both of these results because they act as the demand portion of the market. As I understand it, oil speculators buy contracts for future deliveries of oil based on what they're expecting to happen in the oil market. If they expect prices for oil contracts to fall, they will wait until they do, then make a purchase. Of course they will be right because by not purchasing the contracts at the given price, the market will respond to the fall in demand by decreasing the price. As speculators begin purchasing these lower priced contracts, the demand will increase and drive the price up. Then the speculators can sell their contracts for a better price and make a profit. It's a self fulfilling prophecy. The bottom line, as I see it, is that oil speculators significantly effect the prices of oil, for better or worse.
2. In the article, A Ban on Oil Speculators?, James Hamilton asserts that most of the transactions I mentioned above are all happening within the course of a day so they are essentially canceling each other out. I agree with his point that Kennedy's interpretation of all the statistics are exaggerated and therefor inaccurate. Even though speculators do play a major role in the prices for oil, banning them would not solve the problem. There is a huge demand for oil so whether speculators are representing that demand or the actual refineries/consumers are, there will still be a demand. Furthermore, as Hamilton suggests, people will always try to find a way to make a profit or "hedge their risks" and banning that type of activity would go against the fabric of our capitalistic society.
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