Crude oil has increased 25% in the first quarter of 2008. The news media claims that this is due to the dramatic consumption of energy by China and India. The news also claims that there has been a reduction in the supply of oil from both Iraq and Nigeria.



Supply and Demand Only Accounts for Part of the Price Increase:

The news reports are accurate but misleading. A small percentage of the increase is due to China and India. On a global level the data indicates the exact opposite: that the consumption of oil is down, and the supply is up. In the fourth quarter of 2007, consumption of crude oil declined from 87 to 86 million barrels per day. Within the same period, the supply of crude oil increased from 85 to 87 million barrels. According to leading economists, when supply increases, and/or demand declines for a product or commodity, then the price will drop.

But this is not what happened. During this period, crude oil prices sharply increase.

Commodity Trading is Causing the Sharp Rise in Oil Prices:

How does commodities trading affect oil prices? Partly this is due to the volatility in Venezuela and Nigeria. But primarily it is due to large amounts of investment money into the commodities market from other markets like real estate and the stock markets.

The declining dollar is also a contributing factor. OPEC raises the price of crude oil to compensate for the dollar's decling value. And as the stock market and real estate continue their decline, money is moved from those markets to the oil and gold futures markets. And as a result of traders pushing oil and gold prices higher, a potential bubble is forming.

What is the Future Outlook?

Oil prices will continue to rise until the commodities market for crude oil drops. When this will occur is uncertain. And to what level the prices for crude will drop is also uncertain.

How can we fight back? Current technology provides an answer to high gasoline prices; technology that will reduce gas consumption by significantly increasing the mpg of your vehicle.

The Battle Against High Gas Prices Begins Here:

The auto manufacturers are planning to release high mileage vehicles in the next few years. But there is no need to wait or pay the high costs. With current technology that is inexpensive, we can reduce our consumption of gas by dramatically increasing gas mileage without any expensive modifications to the engine.

The technology available today is electrolysis. Electrolysis is the process of converting water to a combustible gas called oxyhydrogen (HHO). This gas has 3x the BTUs of gasoline, which means it's an excellent energy source.

The system is completely safe. Oxyhydrogen is generated on-demand and fed to the engine as needed. Unlike the Hydrogen Fuel Cell car, oxyhydrogen is not stored in a fuel cell.

As a bonus, when oxyhydrogen burns in the engine's cylinders, it is converted back to water. This means reduced polution at the tail pipe and a reduction in carbon build-up in the cylinders.

Based on your driving habits and your vehicle, the increase in gas mileage will vary. Many have claimed an increase in mileage of over 50%, which results in saving thousands of dollars annually.

This system works along the same principal as the Hybrid car. By capturing wasted energy and then recylcing it as needed, dramatic improvements in gas mileage can be realized. Wasted energy occurs whenever the engine is running and the car is at a standstill, or when coasting along the highway.