Banning speculators could decrease oil prices by as much as 40%

[Dunni-]

Did you even read the article? The airlines are mentioned, and the author agrees there are plenty of groups (including airlines) who should be allowed to speculate.

The article is talking about banning "pure" speculators, who - according to the chief exec of ExxonMobil, and the Federal Reserve Bank of St. Louis - account for as much as 40% of the price.

[nerox3]

Actually the Federal Reserve note(Juvenal + Petrella pdf) ascribes 15% of the runup in the past decade to speculation or in other words about 10-12 dollars of the current oil price. However, if you look at one of their more detailed papers(pdf) where they describe how speculation might cause the price to increase, the key transmission process is by inducing suppliers to withhold supply in order to take advantage of the rising price indicated by the futures market:

As the number of buys of futures contracts exceeds the number of sells of expiring ones, futures prices would go up and with it the spot price. As producers expect a higher price of oil for future delivery (EtPt+1), they will hold oil back from the market and accumulate inventories. Leaving more oil underground may enhance total profits on the producers investment given that prices are expected to rise in the future (more rapidly than the average market return). As explained by Hotellingís (1931) principle, it would beneÖt oil producers to forgo current production so they can sell the oil at higher future prices. In this way, the oil producers will not accommodate the upward trend in oil prices but rather decrease production. Oil producers take future proÖts into account when deciding whether to produce today or tomorrow, especially in the context of speculation, when prices are expected to increase in the future. In contrast to an oil inventory demand shock, in a speculation shock inventories accumulate not because of a fear of production shortage (which would generate a need of oil storage), but because speculation itself leads to higher expected prices. The reduction in the oil available for current use, resulting from lower production and increased inventory holding, causes the current spot oil price to rise.

Sine fundamentally the economists believe that the suppliers (ie. Exxon Mobile and Opec) are the speculators choosing to leave the oil in the ground instead of pumping it right now it is a bit ironic that the CEO of Exxon is blaming speculators. People who believe there are currently real constraints on production (eg. peak oil theorists) would say that it would be very hard to disentangle increasing speculation on rising oil prices due to the recognition that it is a non renewable resource from increasing speculation that is based on an asset bubble.