See Master's paper, linked at post #26. Then read fso301's post at #18. Then you will begin to understand a lot more about what is going on. If you want the graduate level course read Soros's books on his "reflexivity" principle. Then read some economic history of bubbles and crashes, and then you will understand how we hoodwinked ourselves into an ungodly economic mess all worshiping at the altar of what we thought was a free market but turned out not to be.
Master's shows a correlation between oil prices and levels of speculator interest — but, he does not provide solid evidence of causation (IMHO). The “Goldman Sachs Loophole” is only a loophole if there is indeed a need to regulate index speculation — and there is no need to do so, unless speculation in futures markets actually causes price increases in the cash market. Master hasn't proven that the increased speculation isn't caused by rising prices, which have attracted investors & traders to the market.
I've read plenty of economic history, & taken graduate-level economics courses. I've also lived through some bubbles and crashes — so I know that they can happen. I haven't read anything by Soros — though I suppose I should force myself to; because, despite his politics, he does appear to know about market manipulation.
IMHO, there is a bubble in the oil market — but it isn't caused by speculators. The root cause is a shift in the fundamentals of the market — supply is lagging behind demand.
Just when a huge pent-up demand for energy has been unleashed in China and India (amongst other rapidly developing nations) — western governments are doing what they can to restrict new supply. These governments are motivated by the “global warming” panic to drastically reduce the consumption of oil. To them, high oil prices are not a problem — they are part of the solution.
In the U.S., you continue to lock up tremendous supplies of oil — to say nothing of coal and nuclear power.
The result is a very sticky market, on the supply side. The demand side is being tasked to make all the adjustments — by reducing demand. If it were just a matter of the U.S. reducing demand — that might be relatively painless. With the new demand-side pressures coming from the developing world — finding a new market equilibrium point will be very painful indeed.
In the medium to long term, the world will leave the oil age behind. During the transitional period fewer restrictions on the supply side are necessary — or consumers will be burdened with making all the adjustments at the demand side.
The role of speculators in this mess is to provide the markets with the liquidity necessary to discover new equilibrium prices. Government interference in the market has been a large part of the problem — more interference isn't the solution.