Be careful what you wish for

September 9, 2009

As the oil price raced towards its all-time high of nearly $150 hit in July last year, OPEC ministers were fast to blame speculators and back calls for regulation.
But like all the best politicians, they have the pragmatic right to change their tune when circumstances change.
And now U.S. authorities are spearheading the campaign for stricter rules, they don’t seem quite so sure regulation would be a good thing.
Algeria’s Energy and Mines Minister Chakib Khelil didn’t say so in so many words, but his elegant comments on the oil market’s new-found ability to carry on rising in defiance of high inventory levels implied he’d rather the regulators did not bring an abrupt end to the trend.
“If it is a correlation that reflects the new paradigm in the market, then it’s not a major concern, unless you have more control of the financial investors that do speculation,” he told Reuters.
A certain amount of speculation, it would seem, is a good thing.

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