I find it veeeery interesting that this article has popped up now, AFTER oil has dropped from 147.00 dollars a barrel to the 40-ish range almost overnight.
Yes, the economics student in question did commit fraud, no question.
But the bigger question folks should be asking is why, oh why, has oil dropped in price so precipitously recently? The answer is related to this article in that the price was artificially inflated, thanks to traders and hedge funds buying and selling oil futures like hotcakes.
One fraudulent fellow making a mockery of the system, okay fine. He did a bad thing. But the smartest guys in the room were laughing their asses off when we were paying $ 147.00 for a barrel that today costs $ 40. That's a 70% drop in price folks, which has no direct correlation to the supply and demand curve. Yes, supply has increased a little bit and demand has fallen off a little bit. But nowhere near enough to explain a 70% drop in price.
The truth? The price of oil has been over-inflated for years and now it's going back down... will it stay there? Probably not. It's not nearly profitable enough for the big boys you know. They will, undoubtedly find a way to game the price back up to well over the 100 dollar mark. Let's look at a quick little time line-
2003 before the war in Iraq started-
price of oil was in the whopping 30-something dollar per barrel range
2008- price of oil peaked at 147 dollars a barrel (a mild 490 % increase in price from 2003), surpassing the inflation adjusted record set during the late 70's and early 80's. This does mean that no matter which way you cut it, Americans have at this point paid the most for gas and oil under Bush then any other president to date.
Now, I'm not saying the war in Iraq was the cause for oil to jump from 30 to 147 dollars a barrel. Not by a long shot. But clearly, we've been had folks, someone made a ton of money in commodities that were massively overvalued. So, if anything we should be going after the real crooks, who are also very intimately tied to the not so little economic meltdown we're seeing transpire today!