Has the Iraq war led to more oil price speculation?

Question

Apparently one of the key reasons (except of course the fundamentals of supply and demand) for the increase in oil prices has been speculation. Firstly, how does speculation effect prices, and secondly, has the Iraq war led to more speculation, thus further perpetuating the price rise? Please explain clearly and give sources/references.

Answer 1

The Investor's Business Daily editorial board asked, "What would happen if the U.S. won a war but the media didn't tell the American public? Apparently, we have to rely on a British newspaper for the news that we've defeated the last remnants of al-Qaida in Iraq."

London's Sunday Times called it "the culmination of one of the most spectacular victories of the war on terror." A terrorist force that once numbered more than 12,000, with strongholds in the west and central regions of Iraq, has over two years been reduced to a mere 1,200 fighters, backed against the wall in the northern city of Mosul.

The destruction of al-Qaida in Iraq (AQI) is one of the most unlikely and unforeseen events in the long history of American warfare. We can thank President Bush's surge strategy, in which he bucked both Republican and Democratic leaders in Washington by increasing our forces there instead of surrendering.

We can also thank the leadership of the new general he placed in charge there, David Petraeus, who may be the foremost expert in the world on counter-insurgency warfare. And we can thank those serving in our military in Iraq who engaged local Iraqi tribal leaders and convinced them America was their friend and AQI their enemy.

Al-Qaida's loss of the hearts and minds of ordinary Iraqis began in Anbar Province, which had been written off as a basket case, and spread out from there.

Now, in Operation Lion's Roar the Iraqi army and the U.S. 3rd Armored Cavalry Regiment is destroying the fraction of terrorists who are left. More than 1,000 AQI operatives have already been apprehended.

Sunday Times reporter Marie Colvin, traveling with Iraqi forces in Mosul, found little AQI presence even in bullet-ridden residential areas that were once insurgency strongholds, and reported that the terrorists have lost control of its Mosul urban base, with what is left of the organization having fled south into the countryside.

Meanwhile, the State Department reports that Iraqi Prime Minister Nouri al-Maliki's government has achieved "satisfactory" progress on 15 of the 18 political benchmarks,  a big change for the better from a year ago.

Things are going so well that Maliki has even for the first time floated the idea of a timetable for withdrawal of American forces. He did so while visiting the United Arab Emirates, which over the weekend announced that it was forgiving almost $7 billion of debt owed by Baghdad, an impressive vote of confidence from a fellow Arab state in the future of a free Iraq.

But where are the headlines and the front-page stories about all this good news? As the Media Research Center pointed out last week, "the CBS Evening News, NBC Nightly News and CNN's Anderson Cooper 360 were silent Tuesday night about the benchmarks" that signaled political progress.

The war in Iraq has been turned around 180 degrees both militarily and politically because the president stuck to his guns. Yet apart from IBD, Fox News Channel and parts of the foreign press, the media don't seem to consider this historic event a big story.

Answer 2

The rational adults in America are asking why we even have a "shortage" of oil since Americaisrael just stole Iraq, which has the third largest oil supply in the world.