The chart on Chinese car ownership is an important. Eyeballing it, the number of cars seems to have risen about sixfold over the period in which prices began to skyrocket. And that's just China, and only looking at cars.
Some of the conspiracy theorists are simply people with bubbles on the brain, too, I suspect -- having now seen the housing bubble pop, they're looking at this in the same way, thinking "There's no way prices could rise so quickly due to fundamentals." But, as you know, it's quite possible. And the US energy secretary told us as much when he said they were projecting rises of almost 20% in price for every 1% increase in demand.
You've got a fixed supply and a very inelastic demand curve, so as demand shifts outwards with the emerging markets needing more and more oil, price rises should be quite steep. That's at least what I think is going on. It reads more like a textbook S-D situation than an Enron-style process of manipulation. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
So, it would seem "extraordinary profits" are accruing to producers, be it the oil majors or OPEC. Given that there if no slack of production capacity over actual production (unlike in the 80's), the problem seems to be lack of production capacity. Refining capacity is also a bottleneck.
What speculation does is reduce price friction so that prices can more easily respond to (upward) pressures. Given that industrial developments to increase production capacity take years, and claims (in particular by Francois) that as a price for energy $150/bbl is already too high, it would seem that what speculation has done is create a price overshoot by decoupling the time scale of oil price movements from the time scale of energy infrastructure development. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
