Quite a long and interesting article on why oil continues to drop. Much of it is to do with natural supply and demand, but there's also a bit of political backstabbing going on as well. From the article:
The latest plunge in crude oil, perhaps inspired by Saudi Arabia, is likely to put a squeeze on Iran’s budget surplus, which could turn into a deficit if oil prices fall towards $45 per barrel. To finance the government’s subsidies, Iran’s central bank increased the broad money supply by 36% in 2006, sending inflation soaring to 14.6% in September. Tehran cannot afford to cutback on oil production and reduce its oil income, without cutting back on subsidies and risk riots in the streets.
So Saudi Arabia looks to be on our side a bit on the Iran issue. I'm cautiously optimistic about that. I'd love for oil to be around $40-$45 a barrel. That should make gas around $1.80-$2.25 a gallon. Regardless of what happens with price, I'll still be looking at hybrids and other types high mileage cars simply because I don't want to be at the mercy of a foreign governments will to squeeze a few bucks from me.
Travis
travis@rightwinglunatic.com
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