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I’m not an economist and don’t play one on TV.

But it seems to me the author’s argument is likely to be accurate in the long run but not in the short. Speculation can indeed cause prices to rise in the short term, regardless of whether delivery is taken or not.

In the tulip craze, the Florida land boom of the 20s, the recent real estate crash in many parts of the country, and in every stock market bubble since they were invented, physical property for the most part has not been stockpiled. People bid up the price for pieces of paper that in theory represent value, on the assumption that a greater fool will buy them tomorrow for an even higher price. How does this differ from speculating in oil futures and derivatives?

I would also suspect that the length of time the speculative price can levitate above the “real” supply vs. demand price is related to the amount of money invested in the speculations.

If someone can explain (in simple language) why this theory is wrong, I will humbly accept correction.

I think the "demand" for oil and oil products is much stronger that it is for more speculative markets which can be bought on a take it or leave it basis.

Next week I will "have" to spend $500 on gas for my van as I do business in the Southeast.

My buddy who bought 4 spec homes in Key West and is now stuck with them really didn't "have" to buy them. The demand for them was much "softer" than it is for oil. Just a guess.

The supply of conventional crude oil has not grown since 2005 in spite of rapidly increasing prices. Is this because of a coordinated effort by suppliers to constrain supplies?

Maybe, but consider Texas in the 1970s. Peaked circa 1971. Price quadrupled during the decade. Every man woman and child in the state [okay I am exaggerating] went on a drilling campaign and by the end of the decade [with no serious impact from environmentalists] production was still down thirty percent. Pretty much a description of the peak oil concept on a easily understood scale when viewed gazing backward in time.

Now look to demand growth in India and China and the relatively small decreases in quantity demanded in response to much higher prices in the developed world.

Then go back and look at world production that is essentially flat.

Then consider the Texas example [could have used the U.S., the North Sea or a number of other places past peak for illustration, but Texas is illustrative.]

Then ask yourself why you need speculators or conspiracies or even idiotic environmentalist positions to explain increasing prices.

Apply Occam's Razor.