A few months ago, I criticized the absurd 60 Minutes story which blamed speculators for the rise in oil prices. I said the story was "wretched, incoherent and it engages in the worst form of scapegoating."
As is often the case, conspiracy theories sell. If you have a high tolerance for imbeciles, check out some of the comments when Seeking Alpha posted my piece.
Now James Hamilton has looked into the behavior of the oil boom and bust and he comes to the conclusion that oil was impacted by...are you ready...supply and demand.
But while the question of the possible contribution of speculators and the Fed is a very interesting one, it should not distract us from the broader fact: some degree of significant oil price appreciation during 2007-08 was an inevitable consequence of booming demand and stagnant production.