Originally Posted by mulp

Are you taking into account the speculators known as Saudi Arabia, Iran, Kuwait, Venezuela, Russia, the people fighting the state and the oil companies propping them up in a number of desperately poor regions of Africa and Asia?

I think they are speculating that the rest of the world doesn't offer enough new oil fields of importance to reduce their market share, so by not increasing production, the price of oil will remain at or above $125 a barrel for a decade or more.

And one consideration is speculation that the US, the nation that consumes about 25% of the world's oil and gas, just can't come up with any alternative that cuts US consumption by enough to shift the world demand curve left and force the oil suppliers to compete for market share and thus drive down prices.

Certainly if you listen to most conservatives, the American people just aren't inventive enough, are willing to invest in the future, and just won't change in response to the market. That means that the US will just keep paying higher and higher prices for oil, and the Persian Gulf states would be foolish, and damn anti-capitalistic if they didn't do everything possible to charge Americans every single dime they can for oil, and not leave a single penny on the table.

If you think of oil in the ground in Saudi Arabia, then why would they "spend" more than they need by payng more for their needs then they have to. To imagine that they would do that is like your having $100 in your pocket so when you go into Dunkin Donuts you tell them you want $20 worth of donuts, and by the way, you'll only eat three of them, so please hold the extras for you until you come back next week. I think the rational person will instead by two donuts for a buck and keep the other $99 in his wallet, maybe putting $75 into savings for the future. What you are doing when you don't spend $20 on donuts you don't want today is speculating that the price of donuts won't go up enough to make eating stale moldy donuts a good investment.