As you may have heard, oil prices have reached a new high above $140. I can already hear the outcry against speculators and their out-of-control games to enrich themselves at our expense.
Never mind that speculators have been caught shortselling oil (ie betting on a fall in prices) more than a few times in recent months. Never mind that spot oil prices, which require actual physical deliveries of oil at the end of each month, have behaved the same way as paper futures. Never mind that oil storage seems to not be increasing.
Nope, it is just too convenient, too irresistible and, let’s say it, too comfortable an excuse that speculators are to blame. It’s not our fault, we have our scapegoat. Our price increases are temporary, we’ll soon be back to “normal” lower prices, as soon as (take your pick) speculators have been punished/oil companies are taxed for their profiteering/”fundamentals” are left to set prices.
This is just denial
There are A LOT of good reasons why oil prices are going up. Let me show you just a few.
The Oil Drum runs down the reasons they believe $140 oil is real.
Whether they are correct on every point or not, this is a particularly good primer for informing your opinion.