mike_s:
We invade the 2nd largest oil producing country
in the world and our gas is at an all time high when the US government
is subsidising te cost of gas in Iraq.
basically, we haven't done anything to add to the world supply of oil,
which would have brought the cost of oil down. or rather, we have...
by asking Saudi Arabia to raise their oil production, which they agreed
to (i forget for how long)... but that hasn't been enough
the big factors driving the prices up are refining problems and worries over the possibility of Iran getting sanctioned by the united nations over their nuclear program.
also, don't forget Chavez (in Venezuela) making noises that he is going to stop
shipments to the US... all in all, an uncertain market, and an uncertain market
means higher prices
basically what you are seeing are "fears over supply" translating to "higher prices"
(the scarcer the commodity may be in the future, the more people will pay for it now)
also, for the first time in a long, long while, the price of 7-year oil futures have been
rising along with the market, so... we're in for the long haul... there doesn't seem to be confidence in the market that the price of oil will go down any time soon
the good news is that the oil prices are a drag on the economy but not a brake,
since it's humming along well... for now... we'll see how long we can keep it up