For the quick answer that doesn't explain the actual relationship between our need for oil and the oil producing world's clear understanding of how to price it, I'll need far more room. Trouble is, oil wants to cost twenty dollars a barrel and always, even after the recent spike in prices, it looks for a way to get there. To be a reverse indicator would eliminate too many players whose goal is to keep the customer satiated enough to continue to return.

Many President's have tried and many have failed in the attempt to slow down our love for that precious fossil fuel. If early efforts had succeeded, we would not be importing oil from anywhere. In fact, had President Nixon's plan worked, the United States would have been free of importing for over 23 years.

OPEC understands that war makes folks nervous. OPEC understands pricing and the possibility that if countries are forced to find alternative methods, they will. They want to make sure that the price is always at "just right".

Nervous government and business leaders will try to stock pile oil against future problems. So what they end up doing is buying next June's oil needs in February. The retail cost of fuel increases. Equity markets, understanding this relationship in only one way. The cost of production under increased fuel costs means less profits. Profits drive investments. And equities suffer.

But then, OPEC kicks up production, flooding the markets with cheap oil. So companies buy oil further down the road that is far cheaper than the oil due for earlier delivery. The price comes down and the equities markets get excited.

How excited? At best, and real recovery based on falling oil prices probably doesn't have much more than a 2-5% overall increase. But that is better than nothing.

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