U.S. Sen. Maria Cantwell has been using high gas prices to make a populist appeal to the Obama Administration to enact the rules she fought to include in the Wall Street reform bill; the rules regulate financial derivative markets and include regulations on oil speculators. Treasury Secretary Timothy Geithner has slowed the implementation of the derivative swap rules and the Commodity Futures Trading Commission has officially postponed them for six months.

Cantwell's rap? Speculators, as opposed to real buyers and sellers of oil, control 70 percent of the oil market, and artificially inflate prices with their elaborate trading schemes.

Maybe. Or maybe not.

Though they left out a key point about the impact that nationalized—and basically free—oil in Middle Eastern countries (and in Hugo Chavez's Venezuela) has on demand, and thus prices, the Washington Post published an excellent article on Sunday patiently explaining how oil prices work.

Here's what the Post said about Cantwell's bogeyman speculators:
Democrats usually blame "speculators" for soaring gas prices. And Goldman Sachs is usually high on the list. The investment bank runs some of the biggest commodity investment funds and has a widely used commodity benchmark composed largely of oil. Its influential analysts move markets.

Manipulation does happen. The most spectacular example is in natural gas, where prices dropped 8 percent in 14 seconds in after-hours trading on June 8. The Commodity Futures Trading Commission is investigating.

It happens in oil, too. Earlier this year, the commission charged two veteran oil traders with booking $50 million in profits by manipulating oil markets in 2008. They bought physical cargoes they didn't need to artificially inflate prices while also buying derivatives so they would profit as prices rose. They bought other derivatives that would pay off later when prices fell - which they did after the pair sold their physical barrels, catching other traders off guard.

But in general, "speculation" is a loaded term for what investors do every day. Cornering a piece of the market can warp prices, but usually for a limited time.

Cantwell embarrassed Exxon CEO Rex Tillerson in May by getting him to acknowledge that basic supply and demand would put oil at $60-$70 a barrel at a time when it was priced at $98. Cantwell's implication: Speculation was responsible for the difference.

Given the Post's primer, though, I think the burden is on Cantwell now to say exactly how much of that $30 to $40 difference she thinks speculators are actually causing. I've got a message in to her office.