Futures mkts exist to transfer risk. Producers hedge what they produce and users hedge their anticipated needs.
Run a mkt up to well over its measurable economic value, and BOTH long and short hedgers face increased strain on cash flow and working capital in order to maintain their hedges.
And hedging -- properly done of course -- saves money for **everyone** downstream from the producer.
In your opinion, is the current hedging being done properly ? Do you think the hedgers are anticipating that the Gulf of Hormuz is going to be shutdown ?
Born in Scotland. Congrads. Half Scottish myself. My surname ancestors left a long time ago though. About the time the English decided the Scottish had to pay let again. My surname ancestors held a fairly nice keep/manor for over 300 years. Was a gift from the Rebel King for services rendered.