Speculators serve a valuable purpose and I think they are being unfairly blamed. I can assure you, if there is money to be made on the short side of oil or any other commodity or stock, they will go there and specualte. Something tells me people won't be attacking speculators if they are driving the price down.

The real culprit for sky rocketing oil prices is the US Treasury Department and the Federal Reserve. For six years, they have paid lip service to the strong dollar policy only to watch the dollar fall to record lows. Were these two groups to coordinate and intervene to strengthen the dollar, oil would collapse to $100 or less. The cost to produce the last barrel of oil is only $75.

Yes, India and China are becoming greater users of oil, but has their usage increased by 100% in the last year as has oil? No. Much of this move in oil is due to the weakening US dollar. Just to prove the point, oil in Euros is up 13% in the last year. Oil in dollars is up 100% in the last year. When the Fed began it's aggressive rate cutting in January, the dollar weaken and oil spiked.

Until the dollar strengthens, oil will remain high. Oil is down $10 in the last two days, but it appears to be nothing more than profit taking. If we raise interest rates a quarter point, intervene to strengthen the dollar, and release 100 million barrels of oil from the SPR, the crisis will be over. It won't happen though.