Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday....
"We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down," said Michael Masters of Masters Capital Management, calling the amount of money moving into oil futures markets by large institutional investors in the early part of the year "way off the scale."
..."These large financial players have become the primary source of the dramatic and damaging volatility seen in oil prices," concluded the report [emphasis mine, reporting by H. Josef Hebert, "Study Links Oil Prices to Investor Speculation," AP via Yahoo News, 2008.09.10].
Obama advocates restoring sensible regulation to the commodities futures market. McCain, taking his economic cues from Gramm, has sought to protect the Enron Loophole.
I know "Drill baby drill!" sounds a lot more macho than simply changing a rule or two, but let's take a conservative approach: instead of expending all sorts of energy punching more holes in the earth and causing more environmental damage, how about first we try a solution that requires just a couple votes in Congress and a stroke of the President's pen?