$4.00 per gallon. Lucky people! Here in the Highlands of Scotland I'm paying almost $11.00 per gallon and believe me, I'm feeling it.

However, enough of that. Thank-you, Jerry,  for a lucid account of what's really going on. Your's is the first article which I have read on this subject which I could understand and which, furthermore, explained the mechanisms by which crude is traded. Most informative.

I am gratified to read others are also alarmed by the impact of investor activity on commodity prices, including oil. Over one year ago I posted three articles on my blog (theworldlyphilosopher.com) alerting readers to a bubble in the oil markets.  The same indicators which alarmed me at that time continue to to keep me up at night.  One, no rational commercial (viz., oil company) player in the energy markets will add to invetories simply because of the potential for lose.  Two, the disparity between coal and oil prices on a BTU adjusted basis (even after accounting for higher transport, environmental remediation, etc. costs associated with coal) suggest the oil markets are way over priced.  And, finally, there is the ratio of the open interest to the private physical inventories of oil held in the U.S..  Total contract volume is a multiple of the oil on hand.

All points suggest the CFTC has been remiss at its job.  The most favorable excuse for its inaction is a misguided belief that the energy futures markets are like the cash settled financial futures markets.  They are not.  The energy commodity markets historically have served as a bring between producers and consumers to facilitate price discovery.  They were never intended as a means for long only investors to build up sizeable exposure to oil.  Facilitating hording goes aganist the best interests of producers and consumers.