>First off lets make the giant leap of faith and suggest that oil could be taken out of the free market.
>
>Do you expect the oil companies to continue to pour their billions of profits into further research and development of resources?

Yes. Absolutely. their record profits this year (big double digits) compounded over their record profits (big double digits) from last year compounded over their record profits (big double digits) from the year before. Yep.

>Do you expect the supply to increase or decrease?

Stay the same. Maybe decrease some. I bet they'll keep working on supply since they are still making absurd profits on a strategic industry for most of the planet.

>Do you expect demand to increase or decrease?

Decrease in the US. Eventually some people will not be so stupid as to buy huge new SUVs.

>
>Exactly what would you hope to accomplish by taking oil off the market and can you justify attempting that effort, given the historical results when this type of measure has been attempted previously. Price caps do not work, in fact, they make matters much worse.

If this were an industry that was slightly out of control, then minor regulation or jail terms for abusers might work. As this industry has moved into the twilight zone of extreme price gouging of a strategic resource (it isn't just the arabs folks), nationalization of the industry makes a lot more sense.

>
>>What's wrong with this picture?
>>
>>"This is unsustainable and counterproductive," Mr Hayward said. "All it means is that we have less money to invest in new production."
>>
>>According to the BP boss, the oil industry faces the dual challenge of increasing production and climate change.
>>
>>Oil prices this morning fell from Friday's record high after Saudi Arabia's oil minister Ali al-Naimi said the rapid increase in prices was "unjustified". Opec, of which Saudi Arabia is a leading member, is insisting that the oil market remains well supplied despite the surge in prices.
>>
>>However, according to a forecast by Goldman Sachs, the price of crude oil could reach $150 a barrel this summer. "Prices will plateau, not collapse," Jeffrey Currie, the head of global commodities research, told the conference in Kuala Lumpur. "Demand keeps going up but supply can't keep up."
>>
>>
>>http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/09/bcnbp109.xml
>>http://www.reuters.com/article/topNews/idUSWAT00963020080609?feedType=RSS&feedName=topNews&rpc=22&sp=true
>>http://www.breitbart.com/article.php?id=D916O20G4&show_article=1
>>http://www.breitbart.com/article.php?id=080609171236.r6lvrx2s&show_article=11
>>
>>Hmmmm....
>>
>>Every time a market analyst forecasts rising oil prices, it happens. Amazing that they are never wrong. Yet there doesn't seem to be any more demand that a year ago. No less oil available than a year ago either. I'm with the oil minister on this one. Time to take oil off the market?