I also saw a piece on C-Span, I think the tail end of some hearing. The gist of what I caught was that some oil execs and oil industry analysts agree the the realistic price today should be $60-70/bbl. They were saying that the price has been driven up not by the cartels but by speculators.
I don't understand at all how commodity markets work or how speculators can control the price. Part of what I heard is that other commodity markets are regulated to prevent this from happening but oil is not. Can't imagine why that would be.
Here's sort of a brief example:
I sell widgets, today they are selling for 1.00 each.
A speculator wants me to agree to sell widgets to him for 1.10 in one year.
I beleive the price of materials and such won't go up and drive my price up any by then, so I agree.
My motive is I will get .10 more each, if my costs go up, my loss, if they drop I make even more.
The speculators motive is He thinks the price will be even higher than 1.10 and I will be bound to sell it to Him for that.
In my opinion its not investing, but gambling.
So you can see how the Oil futures are being driven up by this. Contracts are sold many months out and lots of gamblers.
Just remember the .com boom, get ready for the OIL boom!Cliff