Maybe it was that oil-refinery explosion in Texas, they said. Or maybe it's because Venezuela is about to cut off oil shipments to the United States. Or maybe it's because OPEC is going to slash production.

None of those ideas passes the sniff test:

There was a fire at a tiny refinery in Texas, but it affected only 70,000 barrels of crude oil a day, .004 percent of the daily production in the United States or .0008 percent of the world's daily consumption. That's hardly enough to make oil rise as high as $100.74 per barrel before settling down to a still-stratospheric $98.75 at the close of the week.

Venezuela's Bush-hating President Hugo Chavez did threaten an embargo of the United States this month, but by the time oil was nearing the $100 mark, he had already backed down, as was expected.

The Organization of Petroleum Exporting Countries will probably vote to trim its production at its meeting March 5, but that's no big news. Demand for oil typically recedes in spring, and it may drop more than normal if the global economy slows. OPEC is simply rejiggering its output to make sure its supply doesn't outstrip demand.

Why have oil prices jumped so much?

There are solid reasons why the price of oil should be high. There's a finite supply of easily accessible oil, and there's strong and rising demand from places such as China and India.

But there seems to be no fundamental reason that prices should be this high.

“If we are going into an economic slowdown, you could make the case that the price of oil should be in the low $80s,” said Bruce Zaro, who specializes in energy and other investments as the chief technical strategist at Delta Global Advisors in Huntington Beach.

But considering the way oil has been trading lately, Zaro said, it's likely that the price could rise as high as $112.

So, again, why are prices so high?

One answer: speculation.

The past dozen years have been a daisy chain of speculative bubbles and bursts, starting with the investments in obscure foreign currencies – such as the Thai bhat – that provoked the Asian economic crisis of 1997 and 1998.

Now, the same folks who drove up currencies in the mid-1990s, dot-com stocks in the late 1990s and housing prices in the early 2000s are at work with oil and other commodities, seeking other get-rich-quick investments.

Each bubble has been fueled by easy money from the Federal Reserve and other central banks. Each time a bubble pops, the bankers' answer has been to pump more money into the economy, inflating the next bubble.

It's hard to track exactly how much speculation is in the market now, partly thanks to an item known as the Enron Loophole. But a congressional study in 2006 estimated that as much as $20 in the then-record oil price of $70 per barrel came from speculation. If that ratio is still true, the nonspeculative price of oil would be $70.54 instead of the current $98.75.

A sustained bubble in the price of oil can inflict major pain. It could arguably push an already-weakened global economy into recession.

“What's scariest about this – and everyone knows this in their gut – is that when you see high oil prices that are sustained for any period of time, bad economic things tend to happen,” said Charles Langley, a gasoline specialist at San Diego's Utility Consumers' Action Network.

“The last time oil got this high (in inflation-adjusted prices) was in the early 1980s, when there was some of the worst inflation and unemployment I've seen in my lifetime,” Langley said.

Making matters worse, we don't even know who these speculators are or what motives they might have. In the past, some speculators have been known to manipulate the market, maximizing the price of energy for their own purposes.

In 2006, for instance, a hedge fund known as Amaranth intentionally manipulated the natural gas futures market in order to make money from short sales. Joseph Kelliher, a member of the Federal Energy Regulatory Commission, found that the company's actions “created losses that ultimately hurt natural gas customers across the country.”

Which brings us back to the Enron Loophole.

Oil speculators have been partly shielded from regulatory oversight since 2000, when lobbyists for the now-defunct energy giant Enron helped persuade Congress to change the way the government regulates energy trading.

Although oil, gas and electricity are all commodities, the Enron lobbyists successfully argued that computerized energy trading should be exempt from federal regulations that apply to other commodities. That opened the door to uncontrolled speculation in energy.

In California, the effects of the loophole were immediate. With no regulatory oversight, Enron and other energy-trading giants manipulated the markets – creating blackouts and brownouts throughout the state – to push electricity prices sky-high. The high prices generated strong profits for Enron and the speculators who followed its lead.

Enron and many of its partners in crime have long since gone belly up. But the Enron Loophole remains in effect.

That could soon change. A House and Senate conference committee is reviewing the Close the Enron Loophole Act, a Senate initiative spearheaded by Dianne Feinstein, D-Calif.; Carl Levin, D-Mich.; and Olympia Snowe, R-Maine.

The act, which passed the Senate unanimously, would subject energy traders to the same rules as other commodities traders, including greater transparency in trading and a ceiling on the number of contracts that one trader can hold at a time.

Traders who violate the rules would trigger a federal investigation, aimed at ensuring that there's no market manipulation or excessive speculation. Theoretically, that could have helped regulators keep Amaranth from what it was doing.

“The Enron Loophole makes it impossible for regulators to prevent major price distortions in U.S. energy markets,” Levin said. “The result has been higher energy prices for millions of Americans. . . . We need to put the cop back on the beat in all U.S. energy markets with effective tools to stop price manipulation, excessive speculation and trading abuses.”

Judy Dugan, who tracks energy issues at the Foundation for Taxpayer and Consumer Rights in Santa Monica, estimates that the Close the Enron Loophole Act could take $15 to $20 a barrel off the current price of oil, as speculators who want to keep their trading secret flee the market.

Dugan's estimate could be overly optimistic. But with unleaded gasoline in San Diego selling for an average of $3.31 gallon – 19 cents shy of its all-time record – anything could help.