The price of a barrel of oil slipped back under the $50 mark yesterday. Now we're talking about the mythical 55-gallon drum. I suspect that the price will drift toward $55 and stay there a long time now that they've hit that mark - a dollar a gallon. That's for crude, which costs about a dollar a barrel to pump out of the ground. Realize that this needs to be processed at some cost to turn it into gasoline. And then there are taxes. And of course a wee bit of profit. So that's why you pay over 2 bucks a gallon at the pump.

The producer price is pretty much based on world security. That dollar a barrel is just to pump it. Next it has to be protected and reliably delivered. That's where the cost creeps up. Still the profits are really only there for the producer. Iraq has the world's third largest reserves, behind Saudi Arabia and Russia. We were around fourth or fifth place. Now I think we're either number one or two with the Iraqi acquisition.

In Baghdad, you would be paying about 40 cents a gallon at the pump. You might pay a buck a gallon out in the badlands where there isn't anybody assigned to guard the gas station. According to Iraqi figures, they are importing about a quarter of their local needs at market prices. We still don't know how much they are exporting to the 'world'. Who is footing the loss on this transaction? We are. The price at the pump is subsidized by the Iraqi government. They pay the difference, and then send us the bill. They're planning to do away with this system. Real soon now. Maybe next year. Or the year after that...