In commodity markets such as gold and silver, speculators impact pricing by changing the available supply of the commodity. When Joe Goldbug buys Gold Eagles and buries them in his back yard, there's less gold available in the market.

But oil speculators -- at least those in the futures markets -- don't take delivery of oil.

Speculators clearly impact forward contract prices, and we have seen their significant impact over the last years in the reduction in oil futures backwardation: where six year forward contracts traded at a 30% discount to spot prices in 2004, they now trade at no discount.

But since speculators always sell before taking delivery of current month contracts, they don't compete with parties that take delivery of oil. For example, if speculators raised prices on near-term oil contracts, delivery-taking buyers could wait for the price decline that would occur just before the contracts matured, as speculators exchanged out of their contracts for farther-forward contracts.

Is my understanding flawed? If not, how can futures market oil speculators impact prices any more than betting on a horse race affects its outcome?