In Defense of Speculators

You’re not going to win any popularity contests being a speculator in the oil market these days. As if Occupy Wall Street weren’t bad enough, a significant percentage of the American public is convinced that speculation is the reason why it’s costing them so much to fill up the tank. Comments by President Obama, Attorney General Holder, and Congressional leaders suggesting that speculators may be to blame for pushing oil prices higher over the last few months have added heft to these claims.

But is speculation in the oil market all bad? What is speculation, anyhow, and is it responsible for the nation’s energy woes? They’re hard questions that have been the subject of tremendous debate--and misunderstanding--in the popular press. I weigh in on the controversy at ForeignAffairs.com. Check it out here.