The problems with the short-sightedness of this utterly stupid investment pattern are many:

1. The faster they ratchet up the cost of oil, and, in turn, the gasoline that comes from it, the faster the public will change its patterns of consumption, the demand will go down, and the bottom will fall out of the market.  That is the most logical supply-and-demand scenario, which ends in Morgan Stanley left holding billions of dollars of lost equity on the oil futures contracts.  Note that Ford, GM. and Toyota – so far – have shuttered factories building large SUVs and trucks (the behemoth Toyota Tundra got axed today), thus, even the opportunity to continue buying these gas guzzlers has begun to be eliminated.  GM has already hybridized the most ostentatious gas sucker of them all – the Cadillac Escalade – thus more than doubling the city mileage of that vehicle.
2. There is no reason for oil prices to be what they are, because there is no shortage.  If there were a shortage, there would be rationing and/or gas lines.  We have been through genuine shortages, most recently in 1979.  In 1979, the price of gasoline increased from 69¢/gallon to 99¢/gallon, while an OPEC embargo was keeping the flow to a trickle.  That was an increase of 43%.  With no embargo, why has gasoline gone up over 100% in the past year (it is roughly $5/gallon in Los Angeles today, and was less than $2.50/gallon a year ago)?  
3. The curves of a bubble are predictable, and this one, as was discussed here last month in Blowing Bubbles, is following in the pattern of several previous bubbles.  Only this bubble, according to the economists at Bloomberg happens to be exceeding the curve of the dot.com bubble, which, when it burst, caused a loss of SIX TRILLION DOLLARS.  Let me repeat.  This bubble exceeds that one. 
4. The "Enron Exemption", part of a commodities trading legislation written by former Senator Phil Gramm (now John McCain's economics advisor), has enabled the kind of under-regulated commodities trading that is still happening in energy markets.  Enron was a private company engaging in capitalism without ethics (remember those?); the devastation was limited to the energy consumers in California (38 million people) who had to empty their wallets to cool their homes during a blistering hot summer, and, ultimately,  investors, employees and the auditing firm that oversaw the criminality.  The present oil bubble is dearly costing every driver in  North America, Europe and Asia, and will, upon bursting take down Morgan Stanley and several other large investment companies that are deeply invested in oil futures, and with them, millions of investors.  
5. The Oil Ministers of Saudi Arabia, Kuwait, and even the President of Iran have all said that there is no reason for the present trading price of oil.  Well, they don't get paid that price for most of the oil that is pumped from their soil (they are paid a fractional royalty), but they are, of course, making vulgar amounts of money from this bubble.  They clearly, however, can see that the end result will be the reduction of demand, and after the inevitable price decline, they will suffer long-term.  
6. As certain as I am about the forthcoming collapse of this bubble, is how certain I am that the price of gasoline will plummet after Labor Day (Sept. 1).  The powers-that-be will want you to have forgotten the "pain at the pump" by Election Day.  But you won't forget.  How could you?  If you have any retirement savings or oil stocks, you will be broke.   If you have a gas guzzling car it will have no resale value.  And while the Fed may bail out still more investment houses (thus further devaluating the dollar) they will not bail you out.  You won't get a dime back.