The Associated Press phrase it this way:
Oil prices have shot up more than $10 to a new record above $138 a barrel after a Morgan Stanley analyst predicted prices could hit $150 by the Fourth of July. Traders were also rattled by rising tensions in the Middle East.
Prices went up on the news that prices were going to go up. I'm reading that to mean market speculators drove the price up. A few days back, George Soros warned of a market bubble. This means three factors are driving up the price of crude. China and India are bidding against us for a limited amount of production, the dollar has plunged on the international markets and doesn't buy as much, and speculators are rushing to get in on what appears to be an easy investment. Does anyone have a feeling for how much each of those factors contributes to the price? If the speculation bubble burst, would the price of gas at the pump drop enough for people return to their old habits and go buy a new Hummer? As is, the silver lining to this all is that people are finally taking energy serious and making changes in their consuming habits for the first time in a generation.