putting all the other little kids' lemonade stands on the street out of business. But isn't this what all monopolies with big cash reserves do to shut down little competitors who compete with a better product at a lower price? That is, they take a loss until the competition goes broke and then jack up prices and make up their losses in spades after their rivals leave the market.

What I don't understand is how our ability to sell our more expensive oil abroad is going to help this. With cheap-to-produce Saudi sweet crude flooding the market, we won't be able to give our high-sulfur content product away, except perhaps to specialty markets like nearby countries where we can compete on maybe shipping or refining costs.

In other words, in markets dominated by big single producers, market forces don't work, at least not as long as the big producers judge they can continue to absorb a temporary loss in hope of generating bigger profits down the line. The Saudis may not be able to manipulate the demand and cost curves to maximize income, but as soon as they crush their competitors they'll be able to pick up right where they left off. We all know how that works, prices go up and demand goes down, but there is a point, a sweet spot, where the product of price and demand, income, is maximized. Isn't that what Robert calls "gaming the system".

I have a feeling this is what the XL pipeline was all about, and why nobody's talking about it any more. Whoever was going to make a killing once that oil was flowing has suddenly found himself sucking canal water. Maybe its a good thing Obama stalled it until the big picture became clear, and then put a stop to it. 8)