the VOA Special English Economics Report.
crisis, then calls to investigate. This is happening now with high oil prices.
Saturday, in Japan, finance ministers of the Group of Eight countries urged oil
producing countries to increase production. But they also called on the International
Monetary Fund and the International Energy Agency to jointly examine the recent
chief Dominique Strauss-Kahn said that some G-Eight ministers were concerned
about financial speculation. How important it is and what influence it has on
the market will be investigated, he says. A report is expected in October.
United States, government agencies are already looking for ways to increase
supervision of oil markets.
Commodity Futures Trading Commission just reached an agreement with a London
electronic exchange, ICE Futures Europe. ICE, the Intercontinental Exchange,
agreed to observe the same trading limits as American markets. Some people have
called ICE Futures Europe a "dark market," a market with little supervision.
want to know more about who is trading in oil futures. A futures contract is an
agreement to buy or sell a quantity of a product at a set price and date in the
future. The New York Mercantile Exchange began trading oil futures in nineteen
markets now largely set the price of oil. Yet these contracts rarely involve an
exchange of real barrels of oil. Most oil is traded on what is called the spot
market or through other contracts between producers and users. The prices,
however, are usually based on futures prices.
MacIntyre is senior oil analyst with the United States Energy Information
Administration. He notes that the position of the government is that market
forces of supply and demand are driving today's high oil prices. But he also
notes that more money has been going into futures.
money can be from oil producers and users. But it also comes from banks, big
investors called hedge funds and speculators with no need for oil. Speculators
try to guess the direction a market will go; in some cases they profit when
Secretary Henry Paulson and others say it is not clear that speculators are to
blame for high oil prices. They say markets need buyers and sellers willing to
take more risk than average investors. But critics say oil prices have gone up
too quickly recently to be explained by supply and demand alone.
that's the VOA Special English Economics Report, written by Mario Ritter. I'm