As mentioned in recent WSJ and Bloomberg articles, the Commodity Futures Trading Commission is conducting an investigation into potential crude oil price manipulation. What is interesting about the story is not only how the CFTC is initiating an investigation, but that they are making a formal announcement of what they are doing, an indirect indication that they are also aware of the public and political outrage given higher energy costs. The CFTC commissioner said it best:

"It's important that people who are paying high gas prices understand the CFTC is on the case and that we're closely monitoring and in this instance deeply investigating any potential abuse in this important energy market"
I guess we will have to wait and see if the investigation uncovers anything of interest, or if it is simply being used to keep regulators and Congress at bay until energy prices hopefully retreat to more "normal" levels (or the public gets used to current prices, which is doubtful).

In addition to reporting about the investigation, the WSJ article does highlight some potential abuses, including using the Platts price-reporting system to manipulate prices. Essentially, traders could issue numerous orders during the window of time that Platts uses for setting the prices that it reports to subscribers. This artificially high or low price could then be used to profit in other markets by taking an opposite position based on the move in reported prices. Another potential manipulation includes spreading false information about oil tankers being either empty or full, sending the wrong impression about supply, and thereby affecting price. Whether either of these potential abuses (if true) could be classified as wide-spread speculation, and thereby causing a larger scale lasting move toward higher energy prices, is yet to be determined.

When considering potential abuses it is important to remember that a company can actually take advantage of insider information regarding its own production and demand when it makes trades, either for hedging or for increasing/decreasing its own position. Since insider information is not technically illegal in the same way it is with equities, this forces regulators to work a little harder to prove that traders were intentionally trying to create an artificial price in order to profit from speculation. Something tells me that this aspect will either be ignored or put into question as some look for validation of out-of-control speculation abuses.