Why are oil prices so high and volatile? McClatchy’s Kevin Hall and Robert Rankin take a look at the evidence and say that neither supply problems, demand levels, nor Middle East turmoil really seem to explain it. 
The answer, rather, is a huge growth in Wall Street speculation:
Some 70 percent of contracts for future oil delivery are now bought by financial speculators — largely big investment banks and hedge funds — who never take control of the oil. They just flip the contract for a quick profit.
….Exxon Mobil Chief Executive Rex Tillerson noted Thursday in testimony before the Senate Finance Committee that this year’s oil prices don’t make any economic sense, though that’s not quite how he put it. He said that current fundamentals and production costs would dictate oil in the range of $60 to $70 a barrel. That’s at least $43 cheaper than this year’s highs of $113 a barrel reached on April 29 and May 2.
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