I created a new blog for CommodityPoint called the CTRMBlog. It seems to be getting quite good traffic already - check it out at http://www.ctrmblog.com

As I write this article, the price of crude oil has already exceeded $70/bbl for a time and other commodities such as coffee and sugar have also reached record prices. Media headlines are beginning once again to highlight "speculation" by hedge funds and other investment vehicles as, yet again, being the culprits for driving up commodity prices—particularly oil. Once again, I feel compelled to counter this media theme and try to focus attention on the real issue which seems to be largely and constantly ignored by both the media and politicians alike. That is that we (the human race) are in deep trouble simply because we are finally facing the end of the era of plentiful and cheap natural resources. The movement into a supply constrained environment will have significant social and political impacts.

The Truth about "Speculators"

Hedge funds and other investors smell profit in commodities because they have understood that where we left things midsummer 2008—with almost every commodity at or close to record prices—was not a temporary phenomenon. It was the rapid collapse of commodity prices that was and remains a temporary situation.

By Gary M. Vasey, Ph.D., General Manager, Europe
and Patrick Reames, Vice President, Trading & Risk Management

An article by Ralph Nader caught my eye this week. In that article he makes the case, with very little evidence, that speculators are to blame fair and square for the high and increasing price of crude oil. It's the sort of piece you would expect from a politician, especially one not overly fond of the oil and energy industry. It's also an example of the true level of ignorance of anything and everything energy amongst politicians and the media. It's why we don't actually have a coherent energy policy—because the industry simply isn't well understood by the people with high profile names or magazines that like to sound off about the issue.