Part of the problem is speculation: individual and institutional investors betting on higher future oil prices. Another big factor is the very weak U.S. dollar. But the bulk of the reason oil and gas prices have climbed so high is that age-old Economics 101 supply/demand equation. Global demand, especially by developing countries, continues to grow, while supply does not.

Most agree that conservation is the critically important first step in altering that equation. Next comes development of alternatives, some that can propel our vehicles, others that cannot but can displace oil and natural gas now being used for energy production.

Oil hit a new record high price of $111.80 yesterday morning, but settled at $105.68 later, a drop of $4.42 for the day. While we're not yet ready to suggest that an end has come to the daily rise in oil prices, seeing the price for a barrel of crude drop, if only for a day, is probably a bit of a relief to some. Before yesterday's drop in prices, many analysts were suggesting that the falling value of the dollar was the largest cause for the recent upward trend in oil prices. Another contributing factor are the Federal Reserve's recent rate cuts. Monday's drop in oil prices though, could possibly point to a more serious problem which has to do with the U.S. economy as a whole. Some analysts see the sale of investment bank Bear Stearns as a sign that our economy is in even worse shape than previously thought.

We aren't stock market experts, so if you want to read more analysis related to the day's events, click here and here.

[Source: CNN Money, AP]