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Source: http://www.gatestoneinstitute.org/2995/oil-supply-prices
Short Supply, Not Middle East Tensions, Push Up Oil Prices
(Gatestone Institute) David P. Goldman - On April 3, Vice-President Biden blamed higher oil prices on "talk about war with Iran"; fear that Iran might "take out the Saudi oil fields and Bahraini oil fields"; the Arab Spring movement; "war in Libya"; the rise of the Muslim Brotherhood; and a potential for unforeseen political unrest, such as "chaos in Russia." Oil prices are going up because the world economy is consuming more oil and supply has not increased to meet the demand. One might argue that the market should price strategic risk into the oil price, but the fact is that markets are not especially good at assigning prices to possible events whose probability can't be measured. The price of oil tracks economic growth expectations. It is statistically absurd to seek another reason. The problem is not risk, but supply. The only way to reduce gas prices is to drill for more oil.