Of course there's potential for profit, but it's no different than stock traders on the floor at NYSE, or other commodity traders in Chicago. They try to buy low and sell high; they're not just buying, buying, buying, because then they'd have to take delivery. They have to sell it too, to someone who can actually use it. There's serious risk to the speculator; if they guess wrong then prices will tank at the wrong time and they'll lose their shirts.
Speculators cannot affect prices in the long term, because they have no real effect on either side of the supply/demand equation. They sell the same amount of oil that they buy over time, so their net effect over time is essentially zero.
By definition, speculators are speculating (betting) on the future price of oil. If they bet right they'll do well, if they bet wrong they'll do poorly, but they have no real effect on the outcome of the bet over time.
These guys have a different opinion than yours:
“Oil has become a speculator’s paradise. Surging energy prices have attracted a horde of investors — and their feverish betting on rising prices has itself contributed to the climb.”
http://online.wsj.com/article/SB109321816171898083.html?mod=home_whats_news_us
Commodity markets do not need speculators never intending to take delivery operating in them. The gasoline supply to demand market will operate just fine without them.
But they are in markets, why? Obviously to make money right? One must assume overall they do make money, and if they do where does the money they make come from?
Since the market doesn’t need them to function but they are there and making money they their speculation has to inject additional costs into the supply -> demand flow.
If these speculators do not inject extra costs (like an additional middle man) that can only mean they are not making money. Since we already know that isn’t the case non-delivery speculation logically has to add cost for the consumer much like a tax or extra middle man would.
The only logical case one could make for non-delivery speculation not adding cost for the consumer is if without them the product price would be higher.
I have never seen anyone make a logical case proving that to be true.
It looks simple to me - non-delivery speculation adds cost for the consumer it has to - if they actually make money.