Department of "Huh"?

Apologies to Brad DeLong for the title, but this op-ed in the Star had me scratching my head:

Control speculative trading in commodities
Making a Point - By Jagdev Singh Sidhu


Quote:

"The price of crude oil has been kept from falling through a combination of planned supply cuts by oil-producing cartel Opec to meet an anticipated reduction in demand in 2009, and the hope of demand increasing as the global economy recovers...The argument is that too low a price will mean trouble for the energy markets as higher costs have already seeped into the business. Refining costs have gone up and so too have exploration and drilling costs over the past few years as oil companies venture off the deeper waters and harder-to-access places in search of the commodity."

This is an argument that the current highish oil price is being supported by a restriction in supply as well as a higher cost structure - an argument based on fundamentals.

This is then followed by:

"Plans to limit excessive speculative trading in commodities by hedge funds must be carried through and enforced. The world doesn’t need higher priced commodities raising inflation, hitting the public’s wallets and slowing any recovery in the economy."

This suggests that speculators are driving up the price of oil - an argument based on market manipulation. So which is it? Given the current deleveraging and risk aversion going on, does anybody have the stomach for "speculating" at all?