RBOB gasoline futures have been on an impressive rally since early December, with the front month futures contract rising more than 25% in less than three months (81 days) before losing some steam in the last week:

Disclaimer: past performance is not necessarily indicative of future results.

Of course, this has translated into higher prices at gas stations, and when the price of a commodity has a visible, negative impact on ordinary people, the speculator-bashers start coming out of the woodwork, right on cue. We’ve tackled this in the past (repeatedly, and in great detail), but this time we found someone else with a great takedown.

Brett Arends over at Marketwatch sees this speculator bashing as more than just ill-informed – he dubs it a conspiracy theory, which makes sense to us. It’s one of those irrational beliefs that people cling to despite an overwhelming lack of evidence to support their assertions. And Arends goes on to make yet another great point in the never-ending effort to debunk the “evil speculators” conspiracy theory:

The Great Oil Conspiracy is a variation on the age-old rumor that “hoarders” and “middlemen” are holding back oil, food or whatever in order to drive up prices further. These rumors have accompanied every single price spike in human history. For any version of this theory to work, future prices would have to be a lot higher than current ones. No one is going to waste time and money hoarding oil if the price is going to be the same in the future, or lower.

Ahem.

In trading at the CME, the price of a barrel of oil for delivery in April is $91. August: $92. The price of a barrel of oil for delivery in March of next year? Oh, $91. For 2016 the price is as low as $84.

In other words, this grand conspiracy is hoarding oil to drive up the price in order to sell for a higher profit in the future … except that they aren’t actually hoarding any oil, and apparently they are doing this even though they know the oil price is predicted to stay flat for a year, and then fall.

Now, Mr. Arends does fall for a common misconception about futures markets, in that the 2016 price of Oil in the futures markets isn’t where the oil price is predicted to be, it is the 2016 price people are willing to lock in today. Besides that, we thought this was an excellent point, but gas prices and oil prices aren’t always in sync, so we decided to apply it to RBOB gasoline futures, too. And what do you find when you look at prices for settlement dates further out?

Disclaimer: past performance is not necessarily indicative of future results.

When the “greedy speculators” who are supposedly driving up the price of gas to profit on the barrels they have hidden at their secret island lair – aren’t looking to lock in 2016 prices  lower than current prices… well, it doesn’t really add up. Why wouldn’t they just buy up the cheaper further out contracts and lock in those low prices instead of the subterfuge? Although no amount of data is going to convince the dyed-in-the-wool fanatics that there’s no evil cabal of greedy speculators cynically manipulating the market to profit from everyone else’s misery, we at least like to take these opportunities to remind everyone that the data does fall on our side.

Oh… and when prices fall – please don’t forget to thank the speculators.