The news in April was all about oil speculators driving up the price of oil, and thus the price of gasoline whch was averaging close to $4.00/gallon. In light of this chapter, what role do speculators play in thee market? Are they responsible for large price hikes?
The speculator's role is to keep track of production, notice shortages, and move products to places that need them. They're not responsible for large price hikes. Gas is expensive, because there is a shortage and that is what causes the raise in price.For a defense of speculators read http://www.econbrowser.com/archives/2012/04/a_ban_on_oil_sp.html. Comment based on the chapter's theory.
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