First, if speculative activity is an important source of the rise in oil prices, we would expect today’s oil price to react strongly to news bearing on future conditions of oil supply and demand. Second, we should see speculative traders holding claims to large amounts of oil for future delivery, in the hope of enjoying a profit by re-selling the oil should prices rise.
Finally, corresponding to the speculative positions held by traders, we would expect to see significant increases in the physical inventories of oil being held for future use. The first indicator, rapid swings of oil prices in response to news about the prospective supplies and usage of oil, does appear to be present and to suggest a speculative element in pricing.