This article examines speculative activity in the oil futures market and revisits key insights from the broader commodity futures literature. We trace the evolution of the oil futures market over the past four decades through the lens of speculators, offering a nuanced perspective on the motivation and behavior of various participant types. While general commodity futures research provides valuable insights, we caution against directly applying its conclusions to the oil market. In particular, the liquidity premium recently identified by Kang, Rouwenhorst, and Tang (2020) is not observed in the oil futures market, underscoring the need for a revised theoretical framework that better captures the unique dynamics and participant interactions in this market. This case also exemplifies the risks of uncritical application of general commodity findings to the crude oil market.
