Scapegoats 101: Oil speculators are back in

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U.S. oil reserves should be put into the market in order to stem recent price rises, Dan Weiss, director of climate strategy at the Center for American Progress, told CNBC. He blamed speculators for the recent rise in oil prices.

Nymex light sweet crude April futures locked in an almost 9 percent price gain for the month of February, while Brent crude saw its futures contract price jump by more than 14 percent last month.

“Speculators are driving up the price, taking advantage of fears about a supply disruption in the Persian Gulf which have not materialized yet.

Speculators are buying two thirds of futures contracts and end-users only one third, when it’s usually the reverse,” he said. “In the U.S., demand is down, and price increases are not demand driven.”

Meanwhile, the U.S. is producing “more oil than it has in years. The amount of reserve oil on hand is much higher than forecast,” he said.

Weiss said speculation can be curbed by bringing some of those reserves to the market in order to bring prices down.

“We’ve spoken about bursting the speculative bubble by having the President putting some reserve oil on the market. Every time that’s been done, it’s led to a decrease in oil and gas prices,” he said.