Currently oil producers blame financial speculators for the oil price volatility while oil consumers state that free markets are really the ones determining the oil price. Call me crazy, but I'm pretty sure I've heard exactly same statements made about six months ago except it was the other way around: Western powers were launching investigations into market speculations while OPEC was saying that it's really the supply and demand that are forcing the price to go high.

How can you stand there and say that speculation has no role in the current market if the price of oil can fluctuate in the 10%+ range within a DAY? Even when there are no inventory reports or supply cuts announcements being made!

On the other hand, Saudi oil minister is saying that we should really get up to a price of $75 per barrel in order for the "marginal producers" to be able to make future investments to maintain future oil supplies. Are you kidding me? When we were at the current price levels of mid-30s per barrel four years ago, I don't remember oil producers making much fuss about the oil price not being high enough for them to make money for future investments. Someone got addicted to oil profits real quick over the past few years and wants to keep the party going. I highly doubt anyone can produce a detailed business plan justifying the need for $75/barrel price in order to sustain future production.

The only issue that I see with the current oil price market is this: volatility. Oil prices simply need to level off and stabilize in order to allow for oil companies and oil producing countries to make reasonable forecasts for capital expenditures. Otherwise, they will be too conservative in their spending and supply will go down too much.

Of course, if you consider the long-term importance of alternative energy sources then $75/barrel may actually be a good thing. Hopefully, President-elect will plow the promised $150 bil into alternative energy regardless of the oil price.