Doug, that is a very accurate and insightful analysis. Thank you, I really enjoyed it.

I was just reading an article about how the stock market index was artificially inflated during the Depression by abuses including as unregulated speculation. The prices of stocks became a function of demand in the market for the stocks rather than the true value of the company that issued them. It seems to be good analogy for the commodities market. Requiring an investor to take possession of the oil at the time of purchase may serve to reduce the number of players, and thus relieve the overheated demand.

The article sparked enough interest for me to review the Internal Revenue Code provision regarding capital gains. The definition of what does or does not constitute an investment for capital gains treatment is very broad. Provided the investment in oil futures qualifies for capital gains treatment, it would seem that as long as the contracts are experiencing a gain the desire for capital gains tax treatment would also make it less desirable to sell the investment in the short term. If the price falls to the level of a loss rather than a gain it is going to become harder for the speculator to unload the contract, and also reduce heated activity in the market contributing to artificial inflation of prices.

Just as you found "East of Eden" entertaining (a great movie) ...I recall a great story in James A. Michener's novel "Hawaii". It concerned a Chinese family that had come to Hawaii as laborers during the 19th century. In later generations the family became a powerful entrepreneurial group. They actively invested in areas showing losses in order to balance the tax liability on their hugely profitable enterprises.