Gas prices = Saudi manipulation?

[nonconformist]

Remember the allegation in Woodward's book that the Saudi prince promised Bush that he would drop oil prices near the election to help Bush win in November? Are we seeing the set-up for that scenario now? There is only so far oil prices can drop... so what better way to make the drop seem significant but to artificially hike them now. Kind of like how retail stores often hike prices then slash them "50% off" to make it appear there are significant savings when it's really not the case.

Is that what's going on here? Artificial retail-like hike/slash practices?

[Redbear]

1. The analysis I have seen

indicates that it's a demand issue, not supply.

One example, China is on a major building binge in preparation for looking modern for the 2008 Olympics.

[FreakinDJ]

2. I thought it was the Drop in value of US dollar

Bush decided not to head off the devalueing dollar

Oil is traded in dollars but it appears it's pricing has been stable when compared to the Euro

[coltman]

3. could be but...

I can't help but feel we are being enroned with fuel like Cal. was with electrics.

[JM]

4. It's more than that

You are referring only to one OPEC producer. THe others would ahve to go along with a price drop, and that would only affect the spot market for raw crude.

Keep in mind our ability to refine petroleum products has not been at full capacity for some time. We have had fires and other refinery closures. Add to that the need for 22 different flavors of summer blends which takes up refining capacity, and you can see there is as much a bottleneck at the refining end as there is in the production area.

If the 22 states that have emissions control blends could get their act together and reduce the number of blends to 1 or 2, then economies of scale would kick in and prices should go down slightly.

Then there is the competing interest of the Saudis vs. the oil companies. Do you honestly think the oil companies will lower their prices as fast as the spot market goes down? This is profit...They are going to make hay while the sun shines.

JM