Enter financial speculation. Commercial end-users of oil such as airlines and trucking companies who once dominated 70 percent of the market for market for future deliveries of oil now represent just 30 percent. Non-commercial financial speculators now dominate 70 percent of the market. The trading is dominated by Wall Street banks, hedge funds and other financial institutions that have no intention to take delivery of the oil needed to make gasoline.
So have those same speculators driven the price of nat gas from 12 bucks to 3.50?
What value does a Wall Street bank or hedge fund add by buying oil futures?
None. They only add volatility, profit on the way up, profit on the way down, so long as the pendulum is swinging wildly they’re happy.
But, the real world is thrown into disarray. Restrict trade to those who not just can but will take delivery and return the process to rational purpose.