What happened to all the speculators driving up oil prices?

Speculators were an easy target for the Congress that wanted to show the people that they are doing something about the oil prices.  A simple explanation of demand and supply was not enough, it was too complex for most to comprehend.

Every story needs a villain, a damsel in distress and a knight in shining armor.  Arguably, the speculator are the real knights but they are not up for reelection nor are they good at pitching their side. So the lawmakers took the opportunity to pitch the plausible story of oil speculators driving up prices.

But as the demand fell due to consumers adjusting their behavior, the oil prices fell back 13% from its highs.  The Nightly Business Report's Suzanne Pratt said this nicely:

PRATT: So what happened to all the speculators that were supposedly driving up prices and ignoring fundamentals? Today, futures regulators said an inter-agency task force has found that supply-demand fundamentals are the best explanation for the recent run-up in oil prices, not excessive speculation, as some lawmakers believe. Many economists and analysts agree that fundamentals, mostly strong demand from India and China, have been the primary price driver, as well as stagnant supplies. But those fundamentals may be changing. Economist Carey Leahy says investors are waking up to the idea that slowing U.S. growth and other global factors could result in a big drop in demand.

Of course there is enough room in this for lawmakers to tell a different story, the mere mention of curbing speculation was enough to slay the dragon.