What is already known is that OPEC will almost certainly cut production at its December meeting. It has several members with faltering economies, particularly Venezuela and Iran. Even countries like Saudi Arabia would like to begin to see the profits that $70 oil were bringing in.

Rumors are that a production cut could hit two million barrels a day. With demand falling in large economies like the US and China, will that be enough? No one knows, but it is a good bet that if this reduction does not do the trick, there will be another one.

Oil may be pushed down by a second important factor. With prices low, the investment in drilling is dropping sharply, which means that, in the near future, supply will take another hit. According to The Wall Street Journal, "As oil and gas prices fall, drilling activity in the U.S. is slowing more than expected, battering shares of drilling companies, hurting economies in energy-producing states and sowing the seeds for supply shortages when the economy recovers."

It would probably be safe to guess that what it happening in the US is also working its way through drilling operations in other large countries. Oil consumers would have to be especially concerned if this is happening in non-OPEC states like Russia, Mexico and Canada where low oil prices are combining with a deep recession to cut capital expenditures on oil exploration.

The price of oil is going up, and if drilling continues to slow, it may stay up for a long time.

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

I read a quote in an article recently which stated, "What Wall Street is about is smart guys thinking about ways to make money from dumb ones." That quote is attributed to one John E. Fitzgibbon, the publisher of an online newsletter, in an article from Eric Dash via The New York Times. While Mr. Fitzgibbon's remark might validate special investing skill on the part of some smart and timely investors, I take exception to the notion that all those investors who lost money in the markets over the past year are the dumb ones.

The question now is, where is the smart money headed?