"All these may be reasons for speculation, ... and from this way of thinking, an answer to the current record high oil price could be found," Zhang said.
Analysts said there are several causes for rising oil market speculation. The outbreak of the sub-prime mortgage crisis in the United States last summer and the resulting turbulence in the world financial market channeled huge capitals into the oil market.
Meanwhile, interest-rate rises in Europe and continued US Federal Reserve rate cuts further weakened the dollar against the euro, which also enticed overseas buyers armed with stronger currencies to the oil futures market.
Faced with increased inflation pressure, many traders also buy commodities such as oil as a hedge when the dollar is falling.
Speculation not only pushed up oil prices, but also increased fluctuation on the world oil market.
It is estimated that speculators control 1 billion barrels of crude oil in future contracts involving a total of 100 billion US dollars. They buy or sell oil futures based on market information, which increased the market uncertainty.
Such speculation could boost oil prices to one record high after another, or cause acute market turbulence as the price bubble finally bursts, analysts said.
While speculators may have benefited from the current round of price surges at the cost of common consumers' interests, uncontrollable rises in fuel prices will exert a negative impact on the global economy by causing sluggish consumption, increasing business costs and pushing up inflation, they added.
The problem has triggered wide concerns, and the US Commodity Futures Trading Commission recently said it was six months into a probe of US oil markets focused on possible price manipulation.
(Xinhua News Agency June 10, 2008)
