Three things that will bring down Oil Prices

All the current talk about drilling for oil in ANWR and wind fall taxes on oil companies to encourage alternative fuels will not have any effect on oil prices in the short term, so I made a list that I feel should have an immediate effect on oil prices -

Save the Dollar - Raising the federal interest rates will have an immediate effect on the price of oil per barrel because it will strenghten the US Dollar.

In case people havn’t noticed while the price of crude oil has doubled  over the last two years in absolute dollar terms for US consumers, the prices have only increased 60-75% for other countries due to the increase in the value of their currencies as compared to the dollar. The same barrel of oil that was costing the Chinese RMB560 two years ago when oil was at USD 70.00 is now costing them RMB960 when oil is closer to USD140.00/barrel a 72% increase as compared to a 100% increase for Americans. Same goes for the Indians as well as Brazil which are now demanding an increasing share of the oil

No wonder they don’t feel the need to cut back on consumption like we do.

Tell them to Just shut up: If only we could stop people like these

 

from opening their mouth – Oil shot up almost 10 dollars once news of these comments hit the wires

or things like these from happening - once again price of oil shot up that day

A lot of experts believe that at least 20-30% of oil price today includes a premium for geo-political tensions then just regualr supply and demand economics.

Limit Speculation: While not proven there are a lot of theories out their that believe that the recent run-up in prices is due to vast amounts of money chasing profits in commodities. A lot of this money is borrowed on margin. If they increase the margin limits a whole lot of speculative money chasing quick profits would be out of the market allowing oil prices to stabilize.

Alas in the political enviornment prevailing today, it is more important for our leaders to score political points then find actual solutions to our problems.