Presented in TIME Magazine under the title Are Oil Prices Rigged?, the controversial Officer-Hayes Hypothesis claims that oil producers have artificially boosted prices by speculating in the oil futures market. It relies on the fact that the futures market is smaller than the physical oil market, so it is in an oil supplier's interest to boost prices in the smaller, price-setting market.
In light of the realization that one firm did, in fact, control 11% of the oil futures market, Officer-Hayes has proved plausible.
Ari J. Officer studies financial mathematics Garrett J. Hayes studies materials science and engineering at Stanford.
