The good old man of Halliburton is on move again - and when US Vice President Dick Cheney visits the old familiar faces in this oil-rich region, eyebrows go up.

Having remained a part of both the energy world and the US establishment for some time, Cheney enjoys tremendous rapport throughout this region. He was the defense secretary during the Gulf War days and is known to have strong personal ties with the upper echelons throughout the region. And now he intends to travel again to the region next week in a climate where $100 per-barrel oil prices appear to be the norm rather than the exception in the crude markets.

What he is really up to?

There are claims that Cheney during the regional trip will urge OPEC members (read Saudi Arabia) to boost output and reel in sky-high prices. And he would begin from where others have attempted and failed. The US has been urging Saudi Arabia and other OPEC members to boost output for some time now. Just before the OPEC ministerial meeting last week, President George W. Bush himself got into the fray, urging OPEC to open the taps. And even before that the issue was discussed in the Kingdom at the highest possible level while Bush was in Riyadh in January. And then immediately afterward US Energy Secretary Samuel Bodman also traveled to Riyadh, apparently on the same mission.

However, despite all international pressure, OPEC did not budge on the grounds that there is no real demand in the market for extra oil. The market continues to be well supplied, it said. Indeed, OPEC is of the firm view that global demand could in fact decline because of the economic slowdown in the US. And now Cheney has been entrusted with the task of somehow convincing Riyadh and others in OPEC to open the taps. Cheney, who leaves Sunday, will be in Riyadh with crude prices high on the agenda. Cheney definitely has an uphill task at hand. He is expected to yield results where others have failed.

He would push for an increase in oil output with Saudi officials, Dana Perino, the White House spokesperson, said on Monday. “Obviously, we want to see an increase in production,” said Perino.

“The president does want OPEC to take into consideration that its biggest customer, the United States - our economy has weakened and part of the reason is because of higher oil prices. We think that more supply would help, and I don’t anticipate that the vice president would have any other message than that one.”

Oil at this price is not good for producers, almost every one in the industry agrees. It makes investment into less accessible oil deposits more viable, thus increasing global supply, while at the same time it encourages consumers to cut consumption.

But the oil cartel has eyes on ominous signals from all around. It could not remain oblivious to issues impacting the industry. OPEC realizes, rightly so, that even one misstep could derail the markets altogether. The US economy lost 63,000 jobs in February, the steepest drop since March 2003. This signals that the world’s largest economy was already losing its momentum, and OPEC cannot overlook the approaching recession in the US.

OPEC hence sees no reason to raise production at this time. The fundamentals of the business - supply, demand, and reserves - is the basis for this perspective. And OPEC has reasons to stay firm. It is not the fundamentals that are impacting the global markets, but rather it is speculation and the hedging of commodities that are playing a role in this issue.

Over the past two years, oil has not been the only commodity hit by this rage. Virtually all the commodities seem to be passing through the same phase. With rice, wheat, corn and feed up between 30 and 50 percent this year, ordinary people around the world are today struggling to afford a simple life-sustaining diet. Indeed, since 2005, the prices of some essential commodities have risen by an average of 75 percent.

The prices of precious metals, iron ore, and steel have also risen steeply. The price of an ounce of gold, which was $350 in 2003, is now close to $1000. The average price of copper was $2,000 per ton but is now over $8,500. The average price of iron ore pellets used to be around $52 per ton; the price is now nearly $130.

Barclay’s Capital noted that over the past few weeks the prices of soybeans, corn, gold, platinum and tin have hit record highs - though not all of them inflation-adjusted highs - while cotton, cocoa, coffee, silver, palladium and aluminum are near record highs. The price of coal is up more than 50 percent.

The Futures Industry Association said last week that trading volume in agriculture-futures contracts grew 32 percent globally last year over the prior year. Trading volumes for industrial metals and energy products grew by 29.7 percent and 28.6 percent, respectively.

OPEC strongly believes oil prices will stay at current high levels for the rest of this year due to speculation and geopolitical tensions and not because of lack of crude in the market. The oil cartel is convinced, in view of the ground realities, that it can’t do much to rein in the bulls. But despite the pressure even from the top and all the talks, oil producers have so far stuck to their guns.

What magic wand Cheney holds that will make his trip to the region more successful than others is difficult to know. At a time when some OPEC producers are skeptical of the US role in the region (not to mention its problems with OPEC member Venezuela) it is unclear what enticements Cheney might have to offer.

Perhaps Cheney is ready to go the extra mile and do things differently. Who knows? After all, he represents the world’s only surviving superpower; one must concede that this counts for something.