L. Gordon Crovitz in the Wall Street Journal:
More-detailed reporting on who has which kinds of positions in oil would make the market more understandable. It would show that so-called financial speculators are trying to predict price movements, but also trying to hedge risk. Likewise, commercial traders that take delivery of oil are hedging risks, while also predicting future prices. As oil expert Daniel Yergin points out, more visibility “will give a better sense of how much is the market responding to supply and demand in physical oil and how much is it responding to the supply and demand of money on the part of investors.”
It doesn’t make sense to shoot either kind of messenger. Markets are collections of information, translated through trading into prices. These prices, unless there is manipulation, are the best estimate of future supply and demand. Such price discovery should not be controversial, though it too often has been.
Yes, but it is disingenuous to suggest that speculators always trade against momentum or that prices always merely reflect fundamentals. Arguing against regulation without nuance and realism is counterproductive, and very hazardous to your short- and long-term credibility. The people who don’t already agree with you will just laugh at this kind of “Unfrozen Caveman Lawyer routine.”