we have made great strides in cutting demand for gasoline by technology and alternatives...However, admittedly, we have no way of controlling India and China's rising demands.
And that says it all really. As Doc said, it's simple supply and demand. When world demand exceeds world supply, expect the price of oil to shoot up until the two are equal. So for example if a big oil refinery/plant is out of action for a couple of months, or a pipeline is damaged, expect a temporary spike in prices. If the demand for oil from developing countries rises as they develop, also expect prices to rise. However talks of a conspiracy where oil companies decided to keep prices high or low or stable because of the fear of people "wearing a jumper" (or "wear a second jumper", as one UK energy executive put it recently
) is unrealistic at best. If the price of oil was set below the equilibrium price at that time, you would have an increase in the amount of oil demanded, but a decrease in the amount supplied (e.g. you wouldn't have oil companies drilling etc. in areas where they expected to make only just enough of a gain at the higher prices if prices were to fall, since then it wouldn't be worthwhile), resulting in excess demand, meaning prices would then need to rise to curtail that demand, and so you're back to the equilibrium price again.
