"The tripling of oil prices since the summer of 2003 has unleashed forces that within the next two or three years will bring oil prices tumbling back down to below $50 a barrel." So said John Cassidy, writing about "The Coming Oil Crash" in the January issue of Conde Nast Portfolio. Yes, the price of oil will come down, though no one knows exactly when. It has topped $100 a barrel and there are indications it could go higher.

There are vast forces at work regarding the price per barrel of oil and one of them is the speculation that has driven up the cost despite the fact that there are ample supplies. The problem is not lack of oil, but whether it can be shipped to a waiting world. The potential for conflicts in the Middle East and elsewhere worries the marketplace.

Sebastian Abbot, an Associated Press reporter, points out that, "Hedge funds and other financial institutions have been buying and selling oil contracts in an attempt to generate profits." Such trading has little to do with actual supply and demand and more to do with the kind of gambling that led to the sub-prime mortgage meltdown. And what goes up will go down. The cost of a barrel of oil is also tied to the value of the U.S. dollar.

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