TJElite

I really doubt this will bring oil prices down. For one, this oil will trade on the same market that all the other oil does...just because it is pumped here, doesn't mean it won't end up in China. As long as someone will pay $150 a barrel, that's what oil will sell for, regardless of where it comes from.

Second, I think the prices are artificially high for several reasons, like speculation, shady trading, and no faith in the stock market (much of which comes from high oil...bad cycle). I don't think it is pure supply and demand, yet. There are no lines at the gas stations, or rationing like there was in the 70's, when there really was a shortage. Also, refineries are only running at about 85-88% capacity.

And if it is supply and demand, US pumping in the next 10 years is going to be a small drop, in a big bucket. With the world demand standing at like 87,000,000 barrels a day, 50 million a year is about 4 hours worth...not enough to move prices, at all.

The biggest mover on price, in the short term, will be when countries like China and Mexio stop the goverment subsidies on gas, causing a real drop in demand...again though, supply and demand is not the only mover.

Biggest problem I see is that the oil companies kind of have us where they want us. Right now, $3.75 gas would seem like a great deal, and $3.50 would be just outstanding. There is almost no reason to let it go back to $2.xx a gallon, and almost no chance of that happening. In fact, I'll bet we see $5.50 long before we see $3.50, if we ever see $3.50 again.

And before you blame US oil companies, consider this. The 10 biggest US and European oil companies only make up something like 7% of the total oil consumption. Sure, their profits are way up, but so are their sales. The % profit is actually the same or lower, in most instances. If they really were just screwing us, the % profit would be up, as well.

Toby