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A concerning number of public officials around the world seems to be making a fundamental mistake when it comes to the oil market and the free market economy.
That's right - free market, not heavily regulated market. Senator Claire McCaskill, a Democrat from Missouri, warned a member of the US Commodity Futures Trading Commission that "if you don't do something, Congress will."
Really? The people who are currently obsessed with sex scandals and are currently embroiled in a back-and-forth over the Iraq war are going to try and enact legislation that will regulate the energy market? Somehow I see that as a little unlikely.
And this nonsense isn't limited to the United States. British Prime Minister Gordon Brown is also under pressure from MPs to beef up regulation of energy pricing.
But hands-down the stupidest suggestion comes from Germany where Social Democrats - part of Chancellor Angela Merkel's ruling coalition - are calling for the G8 to out-and-out prohibit leveraged trading.
"It is pure speculation," according to Uwe Beckmeyer, transport chief for the party, who added that the last 25 per cent rise in oil's price has nothing to do with supply and demand.
Meanwhile Democratic presidential candidate Hillary Clinton is eying up the boogymen in the closet. "I am absolutely convinced that these record profits of the oil companies are a result of a number of factors beyond supply and demand. I think there has been market manipulation," she said last week.
Too bad they are probably wrong. Well, I concede that speculations are part of the price hike. But there are pretty good reasons, let us call them "market forces", which are triggering that speculation.
Who can forget about the weak dollar? Investors have been switching to the dollar-pegged barrel of oil because it is a good deal with the currency steadily growing weaker. The investments are safer during times of stock market turbulence as well.
And while the Organisation of Petroleum Exporting Countries can continue to bang its "there is enough crude oil in the market" drum, investors seem to have the impression that won't always be the case. Certainly demand from economic furnaces China and India isn't going to be slacking off any time soon.
According to the Wall Street Journal, China accounts for 40 per cent of all new oil demand, while continuing to subsidise domestic fuel prices, a practice usually limited to net oil exporters like Saudi Arabia.
Meanwhile, in India the government is continuing with current fuel subsidies, despite recent increases in both Indonesia and Taiwan.
Face it. As long as governments in those two red-hot economies keep those subsidies in place, there is no reason for industry or consumers to cut back on the fuel they burn.
Then there is the ongoing spectre of geopolitical tensions that plague some oil producing countries. Every time a bomb destroys a section of pipeline in Iraq or a refinery is attacked in Africa the price of oil skyrockets.
Then there is the weather. Already analysts are talking about the upcoming hurricane season in North America and what impact it is going to have on the price of black gold.
Who doesn't remember that drastic price hike oil took to a shocking $60 a barrel during the 2005 hurricane season when hurricanes Katrina and Rita destroyed Gulf Coast oil platforms and refining facilities.
All of these factors are driving speculation. The problem is these factors often don't have the impact that investors speculate they will.
But before we look at revamping an entire market, we should take a long, hard look at what investors are basing their assumptions on.
The writer is a freelance journalist based in Alaska, USA.
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