Here We Go Again: With Crude Oil at Record 2009 Prices, Where is Our Energy Policy?

This view that speculation in oil is harmless is seriously questioned in a new study from the Peterson Institute for International Economics, an independent Washington “think tank” that promotes global trade. Mohsin S. Khan, a senior fellow at the Institute, looks at a variety of indicators and explanations and concludes that speculation in the oil market created an oil price bubble in the first half of 2008. Absent speculative activities, the oil price would probably have been in the $80 to $90 a barrel range. In other words, we paid almost twice what we should have.