Gas prices on the rise Are we not surprised

Oil Surge

Politicians are of course watching oil profits like mad men right now. With all the money Big Oil is making - the top five publicly traded firms pocketed over $120 billion in 2007 alone, and with an election on the horizon, it's easy to see why.
With $120 oil not seeming to follow the fundamental law of supply and demand many are wondering if the market is broken. Oil leaped into uncharted territory Friday, soaring past the $126 a barrel mark for the first time, and leaving analysts and investors wondering how high the price will go.
The Federal Reserve has been cutting interest rates, saving Wall Street but sinking the dollar and driving up food and fuel prices. Investors, also called "speculators" by some, have been pouring money into commodities of all sorts, artificially driving prices higher in an attempt to squeak out healthy profits in the face of falling stock values.
That's the supply side of the equation. The demand side is a familiar story, developing regions like China, India and the Middle East are using more and more oil. It's not that this wasn't known last year, when oil was half as expensive as it is now, it's just that the world is moving closer to that tipping point where demand will exceed supply.
The price of a barrel of crude oil has more than doubled in the past year. On May 9, 2007, the active contract settled at $61.55 a barrel.
And if oil has doubled in the past year, what has to happen for oil to hit $150 a barrel?
But to get oil over $150 a barrel, it might take a geo-political upset or a natural disaster. If developments in a country such as Venezuela or Nigeria caused supplies of oil to be completely cut off to the United States, Lebow said that oil could break that $150 threshold.

Oil Rises