You are probably wondering: "When will this happen?" and "Which currencies will be included in the basket? In answer to first question the changeover would take place over nine years. The currencies to be included in the basket include the Japanese yen, the Chinese yuan, the euro, gold and a new unified currency planned for nations in the Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar.

What this means is that oil will no longer priced in dollars.The article in The Independent claimed the U.S. is aware of the talks and is "sure to fight this international cabal."

In an unusual move, U.S. Treasury Secretary, Timothy Geithner, is making a special trip to Saudi Arabia. Why? Authorities in Saudi Arabia have recently withdrawn $50 billion of U.S. investments to reinvest at home. The Saudis are planning a $400 billion stimulus plan at home over the next five years.

With last year's record oil prices, the Saudis racked up a huge budget surplus. Much of that surplus of $500 billion is invested in US Treasury bills.

OPEC nations had their most profitable half-a-year ever. According to the FT, "Members of the Saudi ­Arabia-led oil exporters' cartel took home $645bn (£335bn, €430bn) between January and June." That number could get even better in the second half.

OPEC may be doing exceedingly well and it may be building huge sovereign funds to invest in crippled financial companies in the US and EU, but it is taking on a substantial risk.

OPEC has kept is production fairly flat. The organization has done very little to abate the run-up in oil prices. That run-up has been the one of the two or three largest contributors to a slowdown of economies in the West.

A full-blown and deep economic recession is likely to spread from the West to China and India. If the US consumer cannot afford much beyond his mortgage, gas, and food, imports will suffer, perhaps substantially. Falling demand for imports in the US could spread to the energy-hungry countries of the developing world. In other words, demand for crude could collapse as demand for exports falters.

A sharp drop in oil demand could do terrific harm to the pace at which OPEC takes in cash. Record income may seem good for now, but it could drive very unpleasant and unintended consequences.

Douglas A. McIntyre is an editor at 247wallst.com.

Consumers and analysts are beginning to fear that $130 oil is being driven as much by shortages of supply as by rising demand. But, supply may not be the issue, at least for some OPEC countries.

Saudi Arabia recently said it would up production by 300,000 barrels a day, but that did not seem to thwart oil's march higher. Now the United Arab Emirates Oil Minister Mohammed al-Hamli says he can offer a little more black gold, if the circumstances are right. According to Reuters "We are always happy to put more oil in the market if the market needs more," Hamli said when asked if the UAE would raise supply with the Saudis.

The fight between OPEC and the US turns on that word "if." The US says that increased demand in China, India, and other developing countries has pushed the need for crude sharply higher, and with it, the price. OPEC points to the weak dollar and financial speculation as the culprits.

For now, the West can only continue to suspect that OPEC is not offering more product because it makes too much money at current prices. Nothing the cartel can say will change that view.

Douglas A. McIntyre is an editor at 247wallst.com.

Saudi Arabia will increase oil production by 300,000 barrels a day, a modest jump. The price of crude may drop some on the news.

According to the FT, "Analysts said it was likely that Kuwait and the United Arab Emirates, which have spare production capacity, would follow the Saudi lead and raise output." If other OPEC members follow, oil could be pressured back down as supply increases and speculators move out of the market and cover bets on prices moving above $130.

The leading OPEC members are almost certainly worried about the incredible run oil has had to reach over $127 a barrel. At some point, and that point may be now, the price of crude will throttle the economies of the West and emerging markets like India and China. A sharp drop in demand would leave most producing nations with expensive oil-producing infrastructures running well below capacity.

The supply battle for oil may be nearing an end, at least for now.

Douglas A. McIntyre is an edtor at 247walls.com.

Large emerging market countries will use more crude oil than the US for the first time ever. According to Bloomberg, "China, India, Russia and the Middle East for the first time will consume more crude oil than the U.S., burning 20.67 million barrels a day this year."

While OPEC says that higher oil prices are the result of a weak dollar and speculation, that viewpoint is clearly wrong. Demand for oil is moving up and moving up quickly. At the same time there is evidence that supply may drop. Saudi Arabia has indicated that it will soon stop investing in more oil production facilities. The Wall Street Journal says that "After 2009, the kingdom is putting a brake on new projects, because it fears rising output and consumption of biofuels and other non-fossil fuels will erode crude-oil demand."

Anyone who believes the Saudi excuse for cutting investment is a oil production is a fool. By dropping capital expenditures on new facilities, the country can increase the tens of billions of dollars in profits it makes on $116 oil.

The war between consuming nations and producing nations is entering a new and more dangerous phase. Oil needs to rise 30% to hit $150. Based on the price increase over the last year, that number is not beyond the realm of possibility. Nor is the idea that gas prices could top $5 a gallon.

Oil. More consumption and less supply. Ugly results.

Douglas A. McIntyre is an editor at 247wallst.com.

The World Bank entered the increasingly-divided debate on where oil prices are headed Wednesday by announcing in its Global Economic Prospects 2008 report that oil prices will fall gradually through 2009 to about $75, then fall toward $50 per barrel, in the longer-term.

"In the longer term, the oil market balance is expected to loosen and prices are projected to fall toward $50 per barrel," the World Bank wrote in its report. Oil closed Wednesday down 74 cents to $95.59.

The bank said that because OPEC has limited spare capacity and is holding down production, oil prices will likely remain quite elevated and volatile. However, high prices and increasing environmental concerns should continue to moderate growth in demand.

The Washington, D.C.-based international bank said it sees finely balanced markets in 2008-2009, then rising upstream investment in oil producing countries (OPEC and non-OPEC) should result in new supplies that exceed the growth in demand.

George W. Bush has weakened America's economic and political standing while strengthening the hand of our enemies. As Iowans caucus today, it remains to be seen whether a leader will emerge this year who can reverse the forces Bush set in motion before America loses its leadership position in the world.

What forces did Bush set in motion? Bush created an enormous federal budget deficit through his $1.6 trillion tax cut. He increased government borrowing to a record $9.1 trillion. His wars in Afghanistan and Iraq have contributed to global instability which has helped drive the price of oil up four-fold from $24 a barrel to nearly $100. The dollar has lost 60% of its value -- for example, the Euro has climbed from 92 cents to to $1.47. And his drive to increase home ownership -- supported by subprime mortgage lenders like Ameriquest -- has contributed to tens of billions of write-downs by banks that bought securities backed by those liar loans.

This is not the first time global leadership has changed hands in world history. According to Niall Ferguson, in the 1870s, the Ottoman empire lost its lead in the world as its over-extended empire sought to cope with an external debt crisis by selling off revenue streams to foreign investors. Then, the Ottoman empire sold off its shares of the Suez Canal as well as its tax revenues to pay off the debts it incurred to finance the Crimean War, railway and canal construction and conspicuous consumption. Back then the beneficiaries of those cheap asset sales were western Europeans.

There has been rising concern that countries like Mexico which export vast quantities of oil will begin to use more crude for internal needs like gasoline and manufacturing.

Now Saudi Arabia can be added to that list. According to The Wall Street Journal, "in the works are new seaports, an extended railroad system, a series of new industrial cities and a score of refineries, power stations and smelters." All of that building means that more oil will stay inside the Arab nation. For every 100 barrels of oil produced by Saudi Arabia, 22 are used there. That is up from 16 barrels just seven years ago.

This need for oil to build local economies accompanies a growing need for oil in large developing countries such as China. It is unlikely that this demand will drop any time over the next few years. Alternative energy sources are just not developed far enough.

A number of arguments have been made that oil is trading around $90 a barrel because of market speculation by investors like hedge funds. But the truth is more basic. Less oil will be coming from exporters and the need at importers is spiking up.

Who says $100 oil in not part of the future?

Douglas A. McIntyre is an editor at 247wallst.com.