“Prices are being guided by institutional money managers who are holding between $100 billion and $120 billion in commodities investments.

The only counter-argument to this is that the Texans and Saudis aren’t really demanding any more for their product, since they rely upon the world futures markets to dictate the price. There is some merit to this argument. Speculators in the futures markets are indeed bidding up the price. “Prices are being guided by institutional money managers who are holding between $100 billion and $120 billion in commodities investments. That's at least double the amount three years ago and up from $6 billion in 1999, according to Barclays Capital.” (Source: the Wall Street Journal) Translation: Hedge Funds, who have no economic interest (as opposed to airlines and distillers) for the futures market beyond speculation, are driving the oil market higher. Like the stock speculators of the 1920’s that collaborated to drive individual stocks higher only to unload them at a later date, there isn’t any force on the short side either large enough or that has an interest, in lower prices.
The Phony Rationale for high Oil Price
by Joel Peskoff