We find it easy to say if the Arabs increased production prices would drop, and they might, but, why should they increase production when we refuse to increase our own production? Todays paper mentioned that in 2000 we were running out of refining capacity. Here it is 8 years later and we have not built a single new refinery? Shame on us. (There are some new ones under construction now) We can blame China, we can blame the Arabs, we can blame commodity brokers, but there is one and only one reason that prices are going up. We are willing to pay it! Yes, we need gas, but we could cut back some. When gas hit $2.25 consumtion did not drop. The oil companies are simply seeing what we are willing to pay. When gas hit $2.85, consumtion did not drop. At $3.25 it dropped 1.5%, then went back to "normal". Gas hit $3.50, consumption wavered, but we're not there yet. Until consumption drops 5 or 6% prices will not stabilize. Where will that be? $4.50? $5? You better belive that Exxon and the others are going to find out.
We have a huge amount of oil that remains untapped. Off the east coast, in the gulf, in Alaska. Why use it when the Arabs are willing to sell us all we need?