Gee -- market forces might just kick in to start lowering oil prices.

After all, if the price gets so high as to cut demand for a product, the price begins to drop -- often due to increased production designed to maximize profits.

As prices jumped to another record, a member of OPEC signaled on Friday for the first time in months that the oil cartel might increase its output to prick the price bubble.

The comments, from LibyaÂ’s senior oil official, Shokri Ghanem, suggested a possible shift in OPECÂ’s position. Since the cartelÂ’s last meeting in March, OPEC has argued that the market was not lacking in oil supplies and blamed speculators for driving up prices.

But in recent weeks, prices have come under renewed pressure because of a string of export disruptions from Nigeria. Prices have been above $100 since early February. Crude oil for June delivery closed up $2.27, at $125.96 a barrel in New York on Friday, after rising as high as $126.25 during the day.

Gee, and here I heard it was all greedy oil companies driving up gas prices -- too bad that folks have ignored the supply-side issues at work to rais the cost of a gallon of gas.

Let's follow this one closely -- it may again prove that Adam Smith was right about how markets work, and the Left's idol Karl Marx was wrong.

Posted by: Greg at 11:54 PM | No Comments | Add Comment
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