Black Gold and Fool’s Gold: Speculation in the Oil Futures Market

John Parsons ()

Economía Journal, 2010, vol. Volume 10 Number 2, issue Spring 2010, 81-116

Abstract: This paper addresses the question of whether the oil price spike of 2003-2008 was a bubble. We document and discuss what is known about the level of speculation in the paper oil market. We then analyze the dynamics of the term structure of futures prices, both during the earlier period of 1985-2002 and during the spike. The dynamics of the term structure changed in important ways during this latter period, and we explain how this may have contributed to generating a bubble. We also explain how this answers the puzzle of the lack of accumulating above-ground inventories. Finally, we discuss the implications for regulatory reform of the paper oil markets.

Keywords: oil; futures; speculation; bubble (search for similar items in EconPapers)
JEL-codes: E44 G13 G15 G18 Q43 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://economia.lacea.org/contents.htm

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000425:008582

Access Statistics for this article

More articles in Economía Journal from The Latin American and Caribbean Economic Association - LACEA Contact information at EDIRC.
Bibliographic data for series maintained by LACEA ().