Speculation and Oil Prices (again).

The Grumpy Economist has an excellent piece on how speculation is unlikely to be causing oil price increases.   Read it because the author, John Cochrane, rarely pulls punches.  He's great (and also very smart).

Great quote:

It's also worth noting that on that same day, there were 146,000 May natural gas contracts traded... By what mysterious process can all this within-day buying and selling of "paper" energy be the factor that is responsible for both a price of oil in excess of $100/barrel and a price of natural gas at record lows below $2 per thousand cubic feet?  

As my regular reader will note, I've blogged on this quite a bit before, but I am sure I will blog on it again.  My guess is next in the next election cycle.