Oil Speculation: Correlation or Causation? (|Re-post)

Many factors influence oil prices such as oil reserves, strength of the dollar, and the political atmosphere in producer countries. No one would argue against the influence of speculation on oil prices, however, the extent of this influence is the subject of constant heated debate. A recent research paper examined how changes in oil contract positions of hedge funds affect oil prices. It found correlation, NOT causation; leading us to believe that the extent of oil speculation influence is limited. Yet, the research was hampered by the fact that hedge funds are notorious for their secrecy and generally do not publicly disclose their trades.