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| Home » Carbon management »Energy Speculation
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Energy Speculation |
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Energy speculation has resulted in an increase in the price of energy resources. Energy crisis resulting from excessive usage of energy resources have resulted in price increase. Experts have suggested that if resource usage is not checked, it might lead to problems later on.
Speculation involves making investments that brings about an increase in the amount of risk in a project. Energy speculation involves investment in energy resources. The extent of risk involved is higher in this case.
Usage of energy resources and their availability determines the price of such resources, like oil. Increasing usage of fossil fuels and emission of CO2 in the atmosphere has resulted in shortage of this resource base. It is expected that resource depletion is likely to occur if this increased usage is not checked. This will lead to reduced supply and thus bring about an increase in energy prices.
In fact, investors have already brought about an increase in the price of energy resources. This rise in fuel prices have brought about a rippling effect on the world’s economy. In fact, lawmakers and experts have commented that there has been excessive speculation which has had a crushing effect on the economy.
It has been observed that speculators have brought about an increase in oil prices by almost 71%. This figure also includes the swap dealers. These dealers are there in the market both as buyers and sellers, pushing up and lowering prices respectively.
Several remedies have been suggested by in order to control excessive speculation of energy. More stringent positioning of limits and a higher margin are two ways of dealing with energy speculation.
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