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Oil prices are the result, not the cause of the problem. No matter what the fed does it really isn’t going to help much. Right now they are lowering the rate so the banks can make more $ to offset the losses they realized from the sub prime mess. I think the markets will continue to drop until mid to late summer. Once the banks start generating profits again, consumer confidence will rise, and money will start flowing. The commodities markets (i.e. oil, gold, nat gas) are going thru a period of correction and balance. Lots of short positions and speculation driving the short term price up, but it is reaching the break point (look what nat gas did yesterday) where the market is saturated and there are no viable short positions. Everything I read shows oil will start falling again as consumers cant afford $4/gal gas. The producers will curtail production to maximize profits (thanks Biggs) but that will only last about 3-4 months as they can only short inventories for so long.
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