But there's the small fact that a majority of speculative positions lately have been betting on oil prices going down, not up. In the long run, we're all dead. John Maynard Keynes
Whether it is a good or a bad thing that the current price level was reached ahead of time compared to how it would have been with lower market volatility, I don't know.
If you believe that we need a strong price signal for demand destruction and that reductions in demand are overdue, then it's a good thing.
However, if prices overshoot and collapse because the long-term cost of electricity from alternative sources has been exceeded by a long shot, then it might be a bad thing like what happened in the 1980's.
An optimal rate of increase of the price might be as high as possible but such that there is no overshoot and collapse of the price. Speculation probably makes the rate much faster than optimal and guarantees a collapse after new energy infrastructure is developed and the new energy production floods the market (again, a 1980's oil industry scenario) - give it 5 years. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Using this (simple) Model it is easy to see the effect on pricing of speculation is dependent, in some cases, independent in others. The magnitude of the effect is asymmetrical; always Complex and, under certain conditions, Chaotic.
