It's important to note that this was the opinion of two economists at The Federal Reserve Bank of St Louis and not an official finding by The Federal Reserve.

What is being called speculation is actually Oil Futures trading conducted on The New York Mercantile Exchange. Traders buy and sell oil futures based upon what they believe the actual market price of oil will be when delivery is made.
This article explains it rather well. Oil price Q&A: What are oil futures and how are they traded? - Telegraph

Futures trading is essential to the economy because it provides oil producers assurance that there will be a market for their product and companies using diesel, gasoline etc. a basis from which to project costs and fulfill contracts. The railroads can project and quote costs for shipping since they know in advance what their fuel costs will be. You friendly airline can sell you a ticket for your summer vacation, based upon the knowledge of fuel costs. One good example of this was Southwest Airlines contracting to purchase oil for $55 per barrel for a period of several years when oil prices were below that. Oil prices rose, but Southwest's did not - resulting in a significant competitive advantage.

Demonizing Future Trading and calling it speculation may be good politics but does not deal with reality. The price of oil will continue to rise with summer driving season starting in June and the prospect of the closure of the Strait of Hormuz. Traders are playing with their open money and are certainly more objective than those who wish to point fingers and call them the evil bogey man.