Its all been done before about technology. The US has an unpopular election around the corner. Mcain will lose unless the republicans can get the oil genie back into the bottle for a short while.
Oil will come down to $80-$85 per bbl at lowest within the next 6 months or earlier. What we have been and continue to pay is the first wolrd war tax for Irak and Afghanistan. Irak was 6.5 million Bbls per day. Thats down to less than 1 million if at all.The US still largely controls supply and distribution.
Venezuela, Indonesia (puling out of OPEC), Nigeria, Iran Libya and Algeria all have reasons to short the market whilst Russia holds its own oily breath. That leaves oil production of more than 2/3 of the world's supply in the hands of the spot traders and short sellers.
Venezuela and Iran in particular enjoy the spot trading because it provides them with higher returns away from US controlled distributors. Russia has its own captive states that wanted to become "democratic" and "free market" but can't get away from oil dependance.
Nigeria, Libya and Indonesia like Iran cannot increase out put because of their failure to attract direct foreign investment in new production capacity, embargoes and in Libya's case it traded its punitive payments of fines for 'world terrorism' in oil royalties long term under the threat of a full scale Irak style punishment if it did not comply. Some of those payments now belong to a company that also ran the re construction in Louisianna after Katrina. Remember that one?
The China India demand scenario is a fiction largely. Economic output in these places have fallen in real terms rather than increased to justify that statement.
Only 30% of oil's by products are in fuiel. The rest are in industrial chemicals, plastics, bitumen and the rest.
Oil will fall suddenly, perhaps this week. But that won't stop demand. Alternative technology has been rushed out since the 1970's when the first shock occurred. Saudi Arabia and the Gulf states are American and British privy's in the gulf.
