Burn the "Speculators"!(Letter to the editor)

• Author: Heimlich, John

"Burn the 'Speculators'!" (October) ignores recent evidence validating the idea that index speculation has contributed to volatility in the price of crude oil. Between January and May, institutional investors poured more than $60 billion into the major commodity indices, pushing oil prices up by more than $33 a barrel. Since July investors have pulled out about $39 billion, reducing barrel prices to near $90. These unprecedented price swings in just two months prove the current market structure is severely broken. The quantitative evidence related to supply and demand fundamentals, the value of the dollar, increases in Asian demand, hostilities in Nigeria, Gulf Coast hurricanes, or other variables do not account for either the price run-up in the first six months of the year or the 35 percent drop in the...