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Date of Award


Document Type

Master's Thesis

Degree Name

Master of Science in Applied Natural Resource Economics (MS)

College, School or Department Name

School of Business and Economics

First Advisor

Mark C. Roberts


The price of crude oil experienced a spike during 2003-2008, and this price spike has attracted a great deal of debate on what caused the high price of crude oil. A new view is that speculation played the major part in driving oil prices. In order to examine the main cause of this price surge, we analyze both the economic fundamentals, which include supply, demand, and inventory, and speculation in the oil futures market. Working’s speculative T index is used to examine whether there is any excessive speculation in the oil futures market during 2003-2008. According Working’s T index, we find little evidence of excessive speculation in oil futures market so that there is little evidence to support the view that speculation has driven the oil prices. Instead, world supply and demand may have played the major role in driving oil prices.