I’m amazed that anyone still listens to anything that comes out of the mouths of the carnival-barker cable television “business” pundits who treat stocks, commodities, and financial markets like video arcade games.

If these folks were as smart as they think they are, you have to wonder why they didn’t see the collapse of the financial markets coming. Instead, their treatment of markets as a sporting events helped fuel the fire that took investors to even higher heights, making the fall that much more spectacular – the ultimate reality show.

Maybe it is symptomatic of that “game show” mentality in financial markets, but when it comes to commodities – especially oil – the law of supply and demand appears to have become “the suggestion that supply may have something to do with demand.”Adam Smith must be spinning in his grave.

Currently the oil futures markets are in something called “contango,” which means the price per barrel gets higher every month into the foreseeable future. As a result, people who have crude oil to sell are inclined to hold on to it until the price is higher, as long as the cost to store it is less than the increased sale price they can expect the next month, or the month after that, and so on. So many crude oil suppliers are doing this right now that storage all over the world is full, and some crude oil is even being essentially “stored” in the ocean by putting it in tankers and sending it out to sea to wait.

Demand is up slightly over last year, but still below 2007. So with all that supply, and not very much demand, oil prices should be… anyone? Anyone? That’s right – lower.

But they’re not. They’re higher, almost double the same time last year. Why? Beats me. There is the weak dollar, which means you need to give a foreign supplier more of them to make it worth their while, and there is that contango thing – pay me now, or pay me even more later. But it would not be out of the question for oil prices to come crashing down under the weight of all that supply, either.

George Santayana said, “Those who do not learn from history are doomed to repeat it.” We don’t know what is going to happen to the markets, just as we didn’t know crude oil would drop more than $100 from the Fourth of July until Christmas in 2008. But those who survived the past two years in the ethanol industry know what can happen, and with that history, will be better prepared for the future.