Oil Price Nonsense

BP capital management chairman, Boone Pickens, appeared on MSNBC's 'Hardball' with Chris Matthews this evening. Boone lives in Texas (where else) and blamed the rising price of gas on not enough refinerys to keep up with demand. He said worldwide demand is eighty-five million barrels a day and is expected to hit eight-seven million in the fourth quarter of this year. He also stated the middle east has plenty of oil (well, duh) and "the Saudi's need the money." He also said barrel prices will probably never be below fifty dollars again and will probably hit seventy dollars in the fourth quarter. Asked by Matthews about how all the commuters in the states are going to afford driving to work, Boone non-chalantly answered, "I don't know.."

If all this is true, then why aren't the oil companies spending some of their enormous profits on building more refining plants? I think we all know the answer to that question.