Is it really speculation driving oil prices?

Brilliant analysis of the rise in oil prices by Paul Krugman of Princeton University. Is it really speculation which drives oil prices?

http://www.princeton.edu/~pkrugman/Speculation%20and%20Signatures.pdf

But, this does not preclude the possibility that because of increased speculation and an expectation that oil will rise in the near and medium term, the oil producers might not be pumping as much oil as they would have if there was no such expectation. This is in essence hoarding by the oil producers themselves i.e. they purchase oil at the current price and store it in the oilfields itself.

Interesting point, and it is what an oil cartel is all about.