AP Photo

The quality of media reporting on energy has improved significantly since I started this blog in 2004. However, one subject on which I think the state of energy reporting still leaves much to be desired concerns the role of market speculation in setting oil prices. It's a complex issue, and it has become highly politicized this year. Doing it justice requires more than just the obligatory video of the New York Mercantile Exchange (NYMEX) or interview with a "floor trader". I've encountered plenty of speculation on how much lower prices might be without the influence of speculators, but I've yet to see anyone go the next step to ask how prices might be set in the absence of any speculation at all. This is an important question, because the primary benefit of the futures markets in...