"The problem starts with Ben Bernanke, no matter how many of his Fed presidents claim they are not to blame for the high price of oil. The fact is that when you flood the market with far too much liquidity at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it's still true today."
In the end, it comes down to creating big profits for banks at the expense of the American citizens, because banks need the profits to pay off the bailout loans that the fedgov gave them:
"Ben Bernanke doesn't seem to understand that while he is allowing huge profits for banks and investment firms so they can recover massive losses from the financial meltdown, he is intentionally damaging what could be a much stronger recovery with the misery he's causing the average American consumer. Maybe he does understand and just doesn't care. There's always China to blame."
[read the whole of Wallace's article here: http://www.businessweek.com/investor/content/apr2011/pi20110419_786652.htm]
The Law of Supply and Demand Drives Futures Markets Too
The President characterizes the futures contracts as "bets", which is the standard interpretation and justification for these things. The problem is, the financial elite don't "bet on the market", in the same way that a small dealer is betting when he takes out a futures contract.
Rather, the financial elite are driving the market, because of the tremendous amount of money they can bring to bear. When they issue a buy order, the money flows in. The greater money inflow drives up prices.
When you have the billions in free money, you can move the market like that. It is like a money-making machine. When they issue the sell order, the prices will automatically fall, because they represent such a huge market stake.
An organized movement to rein in the madness can be found here:
Stop Oil Speculation Now http://www.stopoilspeculationnow.com/home.aspx
Obviously, financiers should not be allowed to speculate in markets like this. It should be made illegal, no exceptions, with harsh penalties for those who attempt to profit like parasites on people's need for basic commodities like food and energy. Only people with legitimate economic interests in a market, i.e. the producers, retailers, and consumers, should be allowed to purchase futures contracts to hedge their financial positions.
***The oil minster of Saudi Arabia, for example, points to the large surplus in oil production and stockpiles: