Friday, September 14, 2007

Is the price of oil about to go down?

Good news, for all of you who commute long distances to work or who drive vehicles that get 2 miles to the gallon. A news report from suggests that OPEC feels that $80 per barrel is too much to pay for oil and that the prices is about to go down.

OPEC grand poobah Abdalla Salem El-Badri said today that current price, according to the news story, "[does] not reflect fundamentals and was unlikey to last long."

OPEC has increased production, and El-Badri said he hopes to have a "Country Time" prices. Just as the lemonade famously promotes itself as "not too tart, not too sweet", El-Badri hopes the prices gets to a level where it's not too high or too low.

I know a tiny bit about the oil business, and I know there are lots of factors that go into the prices of crude oil, natural gas and gasoline. For one thing, it's been more than two decades since a new refinery was built in America. Demand, meanwhile, has absolutely skyrocketed. When demand far exceeds supply, high prices ensue. There's also the strength of the dollar, the often-expensive process of exploring for and extracting oil/natural gas from the ground.

I really wish America would take more initiative to become 100% independent of foreign oil through drilling oil in hydrocarbon-rich areas of the country as well as developing alternate energy sources. Keep in mind that there's only so much oil in the ground, and though scientists reportedly have found ways to take large amounts of garbage and turn it into oil, I imagine it's far from a cheap process.

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