If you don't touch the oil, don't store the oil, don't consume the oil, how do they control anything?
As much as 80% of the contracts for future oil delivery are held by speculators.
So what?
Sure, they can default and not take delivery -
Default? What does that mean in reference to an oil futures contract?
after all, the margin requirements are so low that they risk little by doing so.
Yeah, they could lose their margin deposit. How little do you think that would be?
even the CEO of Exxon has said that as much as 40% of the price of oil is due to speculation.
And why wouldn't he say that? Anything that gets the idiots attacking Exxon to attack someone else is a good thing. It's easier than actually educating the idiots.
They hold a contract for delivery. If the oil producers don’t have it reserved for them, then it isn’t a contract. This is in no way a difficult concept to understand. They purchase a contract for future delivery with the sole intent of reselling it, though several large banks HAVE taken delivery - this time with the sole intention of stockpiling it to prevent losses.