Originally Posted by blackberry
As the price of oil goes up so does the cost to produce goods outside the U.S. I think we are seeing some adjustment simply because the Arab world is beginning to realize they are de stabilizing all the third world countries by forcing production of goods back to the U.S. In the long this could be dangerous to the health of the Araab world. Could the pendelum be swinging back the other way or are we just ending a peak demand cycle? Are we just waiting for the holidays to see another round of price increases as the demand increases?
You may have something here but consider,
Since January of this year, there has bee a surplus of oil production and capacity. But.. here is the rub. Normal supply and demand forces don't apply because the surplus is owned by the OPEC producers. They have no reason to compete for our business and we have no alternative. So, they hold back and we pay dear.
However,
Highly publicized and recent indications from the US that we will begin an agressive program to replace oil with new technologies has had no effect. OPEC sees them as pie in the sky. But...
As soon as we said, "maybe we should start punching more holes of our own," the price of oil has begun to decline. Over 20% in four weeks and no signs of stopping.
roadster with a stick