In the past year or so since the Slaughter in Iraq began and our occupation there took place, every single oil company has raked in multi-billions over what they have in the past. But it is not because of the economic law of supply and demand; at the end of every day there is more oil than the entire world uses. Our current supplies are so abundant that prices should be about ten-percent of what they are. But as I noted earlier, as long as the American people buy into the media myth-fact that the US is dependent upon Middle East oil and that the earth is running out of oil, this is the type of fiscal treatment we will receive.
It's a scare, a fright, and a hype that has run the price of a barrel of oil up on the futures markets since the Slaughter in Iraq began. Traders today are mostly momentum traders, just as we find among large stock traders nowadays.
For those of you who have not read my studies on momentum trading, just think of someone putting his money on whichever way the trend is going. If the price is going up, then for no other reason than because it's going up, they buy—following along with the current trend irrespective of actual supply and demand. Or, in the case of stocks, irrespective of whether or not the company behind the stock is with worth a crap or not, if the charts inform the trader that the trend is up, then they buy. And vice versa for when prices are going down—they sell irrespective of the fundamentals.
Don't worry. When prices start fading, when the fear and hype subside, then you can bet that they will crash faster than they rose. They may never get down to where they were a few years ago, when gas was under a dollar a gallon; but they will come down.