Commodities markets face 'scary' times

New York -- Speculators running to the commodities markets in recent weeks run the same risk as standard investments on Wall Street and involve some of the same players.

The move to commodities has attracted small and large investors in recent months. Some of the largest are private equity firms and commercial banks caught up in the credit crisis.

But, as these concerns react to the volatile credit market, they could pull vast sums from commodities, creating volatility in that market, too, The New York Times reported Thursday.

It is "a very scary time," for regulators of commodity markets, Michael Riess, a director of the International Precious Metals Institute told the Times.

"It's a question of just being swamped by volume, volatility and a dramatic shift toward speculative interests," he said.

Acting chairman of the Commodity Futures Trading Commission Walter L. Lukken told the Times that "even with the enormous volume coming through, we think we have gotten a very good handle on the market."

The ups and downs are palatable. Oil rose to a record price of $111.80 on the New York Mercantile Exchange a week ago and on Thursday morning was at roughly $100 a barrel.

Copyright 2008 by United Press International.