The rest of the week, you can blame Hummer drivers, Saudi Arabia, George W. Bush, environmentalists who block drilling projects, Rona Ambrose, hedge fund managers or George W. Bush again. Any plausible culprit will do.

But what if one of the real causes of this decade's amazing oil boom is the humble fellow with the $15 haircut and cheap suit who manages your pension fund? That's becoming a favourite theory of one team of analysts on Wall Street. And if they're right, this week's crack in the crude market -- and the equity market -- could represent the beginning of a trend.

Stocks had a poor opening week in Toronto, with the S&P/TSX composite index falling 3.3 per cent, the most since June. Beneath the surface, it wasn't all that bad. The worst of the drop was caused by commodities, and no commodities do more to swing the index than natural gas and oil, the latter dropping by almost 8 per cent, to $56.31 (U.S.) a barrel. Why? Step outside (without a coat, if
you prefer).

But weather doesn't tell the whole story of oil's steady drop since it touched $77 last summer. Much of the world's crude is consumed on the world's highways. In the United States, by far the largest consumer of oil, two-thirds is used for transportation, rather than heating or electricity. Do people drive less when the roads are free of snowdrifts? No. So something else is going on besides warm weather, and three men at New York-based Sanford C. Bernstein & Co. think they've got an idea of what it is.

Their theory focuses on the futures markets, into which hedge funds and pension funds have plowed increasing amounts of money in the pursuit of fat returns. By some estimates, there's now more than $100-billion in so-called "passive" commodity investments, such as exchange-traded funds based on oil futures.

No scandal in that. But the flood of money has helped to create a situation where futures prices have escalated. If it costs $56 for a barrel of oil today, it costs $60 to buy a barrel that will be delivered six months from now.

That's called contango, and it makes the price of playing the futures game become steadily more expensive. Everyone's a winner as long as oil prices keep going up. But what if they don't? In a recent series of reports, the Bernstein analysts say losses in commodities could cause some pension funds to pull money out of futures. That could bring down global oil prices, analysts say, because oil producers have been storing oil to take advantage of higher prices they get for delivering crude later. Some of that extra supply could get dumped on the open market.

In other words, investors poured billions of dollars into the oil market and created a virtuous circle of rising prices. If the money goes rushing out, might they create a vicious circle of falling prices?

"Ah," say the oil bulls, "but look at the pace of development in China and India." True enough. But for all of the activity in Asia's hot spots, worldwide oil demand increased just 1.2 per cent a year in 2005 and 2006. One reason: High gasoline prices have had a modest impact on the number of miles Americans drive and on their choice of cars.

Meanwhile, oil companies are pumping the stuff out at full speed. Even in mature regions like Utah and North Dakota, crude production has been going up after decades of decline. Add in the spending explosion on new oil projects (and not just in Fort McMurray, Alta.) and conservation efforts, the Bernstein analysts say, "and the longer-term outlook, until 2020 at least, does not look as bad as the peak oil theorists would have you believe."