I suppose we might call it a smokescreen: Blame the steady upward march of crude prices on speculation by financial types, and thereby duck any need to take supply- or demand-related steps to slow -- or even reverse -- the surge.
This week, a trio of groups attempted to squelch the notion that the speculators -- definitely a pejorative term in this context -- and not basic supply and demand are pushing prices northward. One group, consisting of a passel of international oil companies, took direct aim at claims by OPEC and others that speculation is at the heart of the crude price jump to more than $140 a barrel, about double the level of a year ago.
For instance, BP
And then there was Goldman Sachs
Finally, the Paris-based International Energy Agency said that, while blaming speculation is easy, the real reasons for the jump in prices include surging demand growth, supply shortages, and inadequate refining capacity. In detailing its assessment, the agency pointed to price surges in commodities that, because they're not traded on futures markets, are immune to speculation.
This argument should be more than academic for Foolish investors: If you believe that speculation is pushing prices higher, steer clear of energy names because you're witnessing a bubble that must burst eventually. But if, as I do, you think we're simply paying the piper for having long neglected obvious supply/demand considerations, then be sure to include energy representation in your portfolio. My favorite places to start are integrated ExxonMobil