Will oil fall below $100 per barrel?

Under $100/barrel? Higher Margin requirements and regulation on Crude Futures coming after market manipulation confirmed. And realization by OPEC and other crude producers that US will be Energy independent in less than 5 years will cause crude prices to continue to fall,probably below $50/barrel. Add to these factors,the Home heating oil requirements will decline by 50% by 2009 because of coversions to gas and other energy sources (Conversions are now at an all time high)and auto engines that will average 40 MPG by 2010 and the end of our energy crisis is clearly in sight.

Will the democrats still say Bush controls oil prices?

The Baron has a very optimistic outlook and I would love to be in his corner. However, much water has to flow over the dam first. If you expect the U.S. to become energy independent in five years, than you would have to hold a pessimistic view and expect oil to trade no lower than the current. Illogical? No!!
In order to achieve an energy independence goal there has to be motivation and without it, life will return to "normal", which is drive the big SUV and all other not so fuel efficient vehicles. To prove this point I take one back to 1970 - before the oil embargo. In the late 1960's the government had to step in and require the auto companies to cease building larger and more powerful engines. It was the time of two four barrel carbs, lots of power and lots of speed. The joke on the big 425 Chevy "stone crusher" was that it got 4 mph - at idle. Gas was cheap and there was no shortage. The only reasons that these monsters were built was that the public wanted them. Of course, came 1972 and the oil embargo, small and efficient was in. The talk was all on alternative power and energy independence. Five years later oil is plentiful and higher prices get accepted. By the time the 1990's come around there is an oil "glut", prices drop and the "big is better" vehicle makes a return.
If you doubt this than look at all of the Japanese makers and see how many large vehicles they make. In 1973 they only had one size - small.
In short, if there is no real push for electric, fuel cell and hybrids they won't last long or ever get out of the experimental stage.
If oil drops back into the 70-80 range all incentives to do anything will quickly disappear. That includes changing furnaces to gas, getting pellet stoves, coal stokers and the exotics like geo thermal.
By the way - 1/2 a barrel of oil goes to things like plastic and a myriad of other products.
As I said at the outset - I would love to see it come down, however I am more in Mr. Wangs corner as there remain many pressures on this commodity.

Says Richard Behar, President of Capitol Clothing Corp. , a Children's Clothing manufacturer based in Miami, Florida . "High Gas prices have affected our costs for such items as hangers and everything made of plastic has almost doubled this past year and a half.We are optimistic that gas prices will go down at the end of the summer and that should slow down price increases."

Oil - everyone thinks OPEC makes the bulk of the profits when Oil goes above a certain level. Let's visit this theory. First, most OPEC nations (especially the Arab Gulf) keep their money in US banks. They buy US products and besides a few locals and the ruling class, it is Western companies that benefit from their revenues. Second, with oil at such a high, it hurts the economies of China and India (natural competitors to the USA). Third, when a country like Italy makes more in taxes off off Saudi crude, can we truly blame only the OPEC nations when the Western world taxes gas to such a high extent.

My prediction is that oil, like just about everything else, is going through a cycle. Within a year you will see it fall below 100 a barrel. When a major economy like the US starts to feel the pinch, things change. Always remember, it is the strong that set the winds of changes. The small Gulf nations will do as they are told. It is the nature of the beast. I'm just surprised our government has waited so long. I think the time is ripe for them to step in and collect on the debt of saving the Gulf from Mr. Saddam. The fact that Iraq is in shambles didn't help but the weak Princes of the Gulf are the only people who benefited from Saddam's removal.

The whole oil argument is full of holes. Hell, it's full of outright lies. We have far more oil in the ground than anyone is willing to admit. We can get it cheaper and with less enviromental impact than ever before in history. Oversees speculators have fueled the surge in prices. America needs to drill for it's own oil, on it's on ground. At the same time, we need to lead the world in development of REAL alternatives (huge windfarms and E85 are NOT the answer). Let Chavez, Iran and all of OPEC keep their oil. Let them sell it to China. At the rate China is going, pollution alone will destroy them in 50 years. That is unless Al Gore goes over and runs for supreme commie ruler. That should fix it.

Mike is on the right track here, Fuels will continue to drop for at least a while. It will depend on how many deregulation laws are rescinded by congress. The big hedgers will not want their names to come to light so that everyone would know who has been manipulating the price of gas, fuel and oil. In 2000 before the Enron loophole was created gas was what, about 1.25,, since that time the dollar amount invested in oil has increased to twenty times that amount. This number cannot be gauged in the millions or billions, but in trillions of dollars. This amount of investment could easily more then double the oil price by itself. The amount so far exceeded the available oil on the market that it created it's own demand. It would appear that the major players are reducing investments at a steady rate to avoid the federal oversight that will follow along with the civil fines that are sure to be imposed. We can only hope that congress goes far enough fast enough to bring oil back to a reasonable price.

It is also a fact that until recently only a select few were even allowed to speculate within the oil market and these funds were limited to the extent that only those which could receive delivery of the product would have controlling interest. Hedging in the oil market was held specifically for those that would have first hand knowledge of spot delivery and actual production costs.

It is also coincidental that the largest holder of home heating oil futures, Goldman Sachs announced today that oil will again go over 150.00 a barrel.

The thing that truly amazes me is that Congress went home again without any energy laws passed and no one is rioting in the streets. when they do return in five weeks their e-mail boxes should be full of complaints. Why does America rise up to stop this trading madness.