David Chow in the Washington Post has dug up some figures on the involvement of Sovereign funds in commodity indexing. He states that the funds involved did not originate from commodity profits (e.g. Middle Eastern sovereign funds reinvesting oil profits). Since the bulk of Sovereign funds originate from commodity profits of one type or another, and predominantly oil profits, it seems likely that there is more of this type of investment then Chow has uncovered. There is little transparency in the unregulated swap market.
Of course if oil producers are buying oil futures through swap dealers it amounts to shilling–running up prices with leveraged purchases of paper oil.
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