The largest speculators were those that had the capicity to store large volumes of oil when they are be purchased. Short term speculators, usually those without the storage capacity, had very little impact on oil prices. Instead, it is the big firms such as airlines, commerical transportation (fed x, ups), and other large firms that depend on oil, were able to direct the market up.

For example, airline x would buy a future contract for say 100,000 barrels in November of 2009 at a locked in price of $150 per barrel. The reason they would do this is the fear that oil might be at $200 per barrel at that time.

That way, the firm would be able to sell the 100,000 barrels at $200 per barrel, using the profit to offset the cost of fuel when oil is at $200. In the first quarter of 2009, we will see these contracts beginning to surface when oil is considerably lower. This situation will serve as a lesson to those who over-capped their hedge, which is why this industry is self regulating.

Oil rich countries who cut production when the price is low are playing with a double edged sword. Yes they are securing future potential margins, but they are also significantly reducing their income, and causing unrest as people lose their jobs when production is cut back...

Thats all i have to say about that:jointsmile: