You hear it everywhere in the press… “Oil is in a bubble and it’s all down to speculators driving up the price”.

Once they started going long on oil it was fairly easy to perpetuate the run… all they have to do is buy at the ask price and oil just keeps going up and up.

US commodities regulator the Commodities Future Trading Commission  (CFTC) has launched begun to investigate possible market manipulation in the US crude oil market amid record oil prices and oil company profits. This from The Daily Telegraph:

The Commodities Future Trading Commission (CFTC), working closely with other international regulators including the Financial Services Authority in the UK, has begun a series of detailed inquiries over concerns that energy speculators are behind the rising oil price.

What you’re looking at below is a chart of the gold-to-oil ratio. The gold-to-oil ratio is exactly what it sounds like. You simply take the spot price for an ounce of gold — around $900 per ounce as of this writing — and divide it by the price of a barrel of oil.

What to do with your refiner shares.

Inflation is global and it has prompted French president Nicolas Sarkozy to seek a cap on sales taxes on fuel products if oil prices continue to rise. This from Thomson Reuters:

French President Nicolas Sarkozy said on Tuesday the European Union should consider capping sales taxes on fuel products if oil prices rose further but his proposal got short shrift from Brussels.

As crude oil prices smash the $135-a-barrel barrier for the first time, Taiwan, Malaysia and Indonesia say they will take action to protect their state-owned oil companies.

“If oil prices keep going up, it is simply not in any country’s best interest to keep subsidizing these prices indefinitely,” says Peter Gastreich, a UBS oil and gas analyst, in the Financial Times.

Questioning the Fed’s moves… Euros slow down… Aussie hits 25-year high… Oil hits $135!

Liquid coal — synthetic fuel produced from coal — could make a big dent in the Defense Department’s energy bill, as it struggles to find alternatives to sky-high crude oil prices.

This from The Wall Street Journal:

With oil’s multi-year ascent showing no signs of stopping — crude futures set another record Tuesday, closing at $129.07 a barrel in New York trading — energy security has emerged as a major concern for the Pentagon.

Oil prices set a new record just shy of the $130 a barrel level yesterday (Tuesday), despite a concerted – though probably futile – effort by the U.S. government to rein in the runaway commodity.