How much has speculation driven commodity prices?

This piece looks at several aspects of commodity market speculation that are often invoked to support the conventional wisdom which asserts that speculation has not been a driving factor in commodity prices. Overall, we find that the evidence regarding inventories, the shape of the futures of the futures curve, the ease of storage and the responsiveness of supply and demand to prices all point to speculation being a driver of spot prices in the case of oil. And although some of the evidence does not support the case for speculation in metals and agricultural commodity markets, it does not provide a knock-out blow either.