Phoebus wrote:The vast majority of trading in any large market is conducted by speculators, and it is literally their sole purpose in life to analyze whatever it is that they consider their speciality, and to then make a bet based upon that knowledge. Thus, markets are technically the most efficient and effective information aggregators ever devised: a deep market reflects, via price, the culmination of all knowledge which the participants deem valuable.
Thus, to say that a price went up because of speculation is tautological - all price moves in all large markets are due to speculation, whether they be up, down, or flat. Whether a price moves over decades or over milliseconds, the speculators are the ones on the front line, ensuring that prices reflect pertinent information as quickly as possible.
Finally, this shows why government price controls, especially on a fungible and easily transported commodity such as oil, are always fruitless. The government obviously knows inordinately less than the traders about the future price oil, and any attempt to force the price this way or that results in long lines at the pump as oil traders send their wares to more profitable locales - unless, of course, the government is willing to subsidize the price by paying out of its' own pocket and making up the difference.
On a completely separate note, all excise taxes on cheap energy - fossil fuels at the moment - are in my opinion pointless. Every last drop of cheaply accessible oil, every last gram of cheaply mineable coal, WILL be consumed. Perhaps not by us rich folk in the west, but by someone. Cheap energy is a matter of life or death for billions of poor humans, and it will not be kept away from them - whether right or wrong, I simply don't see consumable oil sitting idle when people are begging for it.
Rubbish. The financial markets are the commercial equivalent of headless, schizophrenic chickens. If they were indeed as knowledgeable as you have made out they would be less volatile than they are - there are paranoid insane dictators that display more rational behaviour than they do. A few individuals may actually know what the hell they are doing, a la Warren Buffet, but the rest are idiots.
'As every individual … therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the general [Smith said "public" not general] interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security, and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, [as in many other cases] led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it'
Adam Smith's oft-misquoted 'invisible hand of the market'.
You may as well get used to forms of protectionism as there will be economic blocks. It is already happening - the EU is taxing any goods that originate outside of the EU - the United States has already commenced putting tariffs on Chinese solar. Eventually, oil will be placed into this category as alternatives are put into use.
One factor for the increased oil prices has been the closing down of refineries due to bankruptcy allowing the others to charge extra and claw their way back to safer levels of profitability. The other major factor is inexpensive cars in China and India allowing a lot more people to become consumers for the first time.