At the speed limit, those in their SUVs pass you because they can afford the gas, no matter what the price. Those in smaller, more "fuel-efficient" vehicles pass you because gas is coming down in price (for now) and they're not even noticing any fuel savings because they're driving faster now. So folks like us can laugh while they go on about their merry way, stopping for fuel more often than we, and they can pass us again after they've filled up.

As for India and China, they'll soon have bigger problems than affordable gasoline. Virtually NO water from the Yellow River in China reaches the sea due to extremely poor management by the government, and a series of dams which reduces the flow to a trickle. And the water that IS flowing is app. 75% unusable due to extremely lax pollutiion laws. No one can drink it, cook with it, bathe in it, or even water their meager crops with it. China may well go war over water, floks, not petroleum.

Big1Ed, THE one!

Big1Ed, THE one!

The recent and substantial drop in U.S. demand is the most direct reason for the recent drop in oil prices, not the fact Bush recinded an executive order against off shore drilling. Even after Congress would act to give that action any real meaning, the consensus of the experts is that any significant impact from offshore drilling in this country is YEARS away. T. Boone Pickens, one of the most successful oil men in American history, agrees, stating that we can't drill our way out of this crisis!

Promoting offshore drilling for the American "oil junkie" is like a herion junkie demanding we grow more American poppies in the national parks to bring down prices on his addiction. It simply doesn't address the real problem, and represents a palliative measure at best against what is fast becaoming, if it's not already, a terminal condition.

Increased production is but a small part of the ultimate and real solution to the world energy crisis, but one that would be still only be effective in the short term, at best. Despite your tag line, I would recommend a bit more reading in your case.

Respectfully, Krakus

If storage exceeds demand then price goes down. If demand exceeds storage then price goes up. The speculator's job is to see 4-5 years into the future and try to determine which direction supply and demand will be going. Right now, the demand far exceeds the supply.

At one time the U.S. could control the market because of our high demand - cut back on driving and the prices would tumble (remember the 70's?). The difference this time around is that we are no longer the ones in control. The market is more in the hands of China, India and Russia, whose growing demand on oil is pushing the prices faster than the supply can keep up. Right now, the speculators are seeing this and betting it keeps up; so, yes, they are making money, but they are not controlling the prices, merely reacting to the market demands.

Notice how the price has dropped since Bush removed the ban on drilling? This is because, for once, speculators see a ray of light at the end of the tunnel - additional supply hitting the market. Want to see the prices drop even more, and a lot faster? Get congress to do the same. Once vast amounts of oil can be seen coming in the near future (4- 5 years), you will see the speculators start cutting back on the price they are paying. They are not the driving force, rather they are the indicators of what is to come.

Why don't the oil companies drill where they currently have leases? Easy, three reasons: first, they are being held up in court by the environmentalists who are filing suits to prevent drilling, even though not a drop of oil was lost in Katrina; second, states like California who have their own bans against off-shore drilling because it will "ruin the tourism industry" - ever been to the Gulf Coast? How many rigs do you see from land? Finally, not all of the land that they have leases on has accessible oil, if any oil at all. Along with the lease to drill comes the right to determine if there is any oil, can't do the one until you have the other. Until they have the lease to drill, they don't have the right to actually determine if there is accessible oil. They can speculate (there's that word again), but they can't be sure.

Quit reading -- go outside and do something!

Krakus, also good points. Remember, though, that 99% of all life that has ever existed on Earth is now extinct. Of course, we humans darn sure don't want to join THAT party, so we need to develop other energy sources while making the most of what we've got while we still have it. That means drilling for oil wherever we can find it, as well as finding other sources for the future. Methane, anyone?

Big1Ed, THE one!

However, I must differ with you on your lack of environmetal sensitivity. The earth surely has suffered worse calamities than man in it's history; there have been several mass extinction events, the most recent of which has been theorized as causing the rise of mamals and man himself. And, most assuredly, it will be around long after us.

But that's an eventuality that I would think is worth whatever effort is necessary to contravene it. The earth has a way of maintaining balance in it's ecosystem; if we do not act, Mother nature may decide that the carrying capacity for the human species on this world has been exceeded. And she can so easily use our own greed, combined with a technical prowess that has created weapons of mass destruction, to effect that reduction... after all, she has repeatedly demonstrated an enormous capacity to cleanse and restore herself... once an irritant has been eliminated.

Respectfully, Krakus

Bildog13

And it's not just the enviro-wienies who are responsible. The futures speculators also have a lot to do with the price of oil going up. Maybe we could hear from a highly educated trader about this subject.

Yes, the enviro-wienies make me sick, too. The earth has suffered through a LOT worse than what we've done to it. It'll be here long after we're gone.

I never, never, never claimed to be an english major just a geologist who trys to spread the truth about oil not being a limited resource and the prices being exceptionally high because of democraps and the greeny weenies passing laws to control free people!!!

Bildog13