Saudis Blamed Speculators For High Oil Prices

McClatchy (h/t nc links)  It is old, but a good reminder as oil prices spike:

The Saudi concerns about speculation have a particular sheen of credibility. Saudi Arabia is the world's largest exporter of oil, serving dozens of clients in addition to the United States. As such, it carefully tracks the trends that drive oil prices, which send it billions of additional dollars with every increase.
But in the cables, Saudi officials explain that they have two primary concerns about artificially high crude prices: that they'll dampen the long-term demand for oil and that the wide price swings typical of commodity speculation make it difficult for them to plan future oil field development. After that $147 a barrel peak in 2008, for example, prices plunged to $33 a barrel as the global financial crisis rocked the world. That was a stunning change in less than half a year.
One cable recounts how Dr. Majid al Moneef, Saudi Arabia's OPEC governor, explained what he thought was the full impact of speculation to U.S. Rep. Alan Grayson, D-Fla., who in July 2009 was in Saudi Arabia for the first time.
According to the cable, Moneef said Saudi Arabia suspected that "speculation represented approximately $40 of the overall oil price when it was at its height."
Asked how to curb such speculation, Moneef suggested "improving transparency" — a reference to the fact that most oil trading is conducted outside regulated markets — and better communication among the world's commodity markets so that oil speculators can't hide the full extent of their trading positions.
Moneef also suggested that the U.S. consider "position limits" — restrictions on how much of the oil market a company can control — something the CFTC is considering. But the proposal to prevent any single trader from accumulating more than 10 percent of the oil contracts being traded hasn't received final approval, and the CFTC also has yet to define what it considers excessive speculation.

I really don't understand why there aren't position limits.  Why can the Saudis come up with better regulatory ideas than our own government?  I guess because they aren't bought off by Wall Street like our government is.  The commodity ETFs are flooding the markets with money.  They are being sold to lower end investors, so it is likely the smart money is moving to the other side of the trade.  Don't be surprised if there is a price bust in the not too distant future.  I would guess that all the warmongers pushing Iran talk are making the markets pretty jittery as well.