From the Wall Street Journal's Real Time Economics blog:
In the latest Outlook column, the Journal’s Justin Lahart looks at the debate over whether oil prices are experiencing a bubble.
It is far from clear that the first part of the bubble definition — prices in excess of their fundamental value — is in place. But the second part — that people are buying in anticipation of selling at a higher price — certainly is. Speculation has long played a role in the commodities markets, but in recent years it has become much larger.
The traditional role of the commodity-futures markets was to allow players such as farmers and oil refiners to hedge against unexpected price swings. Now, more institutional investors are wading into commodity markets to invest, rather than hedge.
Hedge-fund manager Michael Masters told a U.S. Senate committee last week that institutional investors “are one of, if not the primary, factors affecting commodities prices today.”>>>Much More, including 101 comments.