This is an excellent article in today's WSJ online about what causes commodities, oil in particular to rise...and what can make them fall.
Since it is a paid subscription I probably shouldnt paste the entire article...her is the link: http://online.wsj.com/article/SB121486800837317581.html?mod=hps_us_mostpop_viewed
You should read the full article to fully understand the reasoning behing the following statements:
Now here is the good news. Any policy that causes the expected future oil price to fall can cause the current price to fall, or to rise less than it would otherwise do. In other words, it is possible to bring down today's price of oil with policies that will have their physical impact on oil demand or supply only in the future.
For example, increases in government subsidies to develop technology that will make future cars more efficient, or tighter standards that gradually improve the gas mileage of the stock of cars, would lower the future demand for oil and therefore the price of oil today.
Similarly, increasing the expected future supply of oil would also reduce today's price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.
Any steps that can be taken now to increase the future supply of oil, or reduce the future demand for oil in the U.S. or elsewhere, can therefore lead both to lower prices and increased consumption today.
â€œ"If ye love wealth better than liberty, the tranquility of servitude than the animating contest of freedom, go from us in peace. May your chains sit lightly upon you, and may posterity forget that ye were our countrymen!" â€”Samuel Adams