The new participants, investors and speculators, to the world's two trillion dollar-a-year oil market are hastening the adjustment process that has become so urgent with the virtual elimination of the world supply buffer. With the demand from the investment community, oil prices have moved up sooner than they would have otherwise. In addition, there has been a large increase in oil inventories. In response to higher prices, producers have increased production dramatically and some consumption has been scaled back. Even though crude oil productive capacity is still inadequate, it too has risen significantly over the past two years in response to price.

Surely we all agree that it is valuable to have prices rise early in the case of oil production peaking? That looks to me like the point of what you were referring to. I'm not sure I see that much evidence that "producers have increased production dramatically" and "crude oil productive capacity ... has risen significantly." as he puts it. While I would agree that the rate of oil consumption increase has at least temporarily declined, I doesn't look as though consumption has been reduced, if that's what is meant by "scaled back."

The only ways for the market to balance are through increased supply or demand destruction. If supply increases are extremely difficult or impossible (or as Greenspan puts it, "Returning to such a level of spare capacity appears wholly out of reach for the foreseeable future, however."), then it seems like anything that hastens demand destruction without destroying economies is a good thing. Investors buying futures and raising prices works just as well as a gas tax.