Oil is the energy resource that captures public attention, but its poor cousin natural gas could be the one now offering more interesting investment opportunities.

The bull market in oil comes down to just two simple numbers: The world can’t produce more than 85 million barrels of oil per day. The world wants 87 million barrels of oil per day.

Inflation is global and it has prompted French president Nicolas Sarkozy to seek a cap on sales taxes on fuel products if oil prices continue to rise. This from Thomson Reuters:

French President Nicolas Sarkozy said on Tuesday the European Union should consider capping sales taxes on fuel products if oil prices rose further but his proposal got short shrift from Brussels.

Consumers are suffering because the stupid European governments boosted spending for a decade or more, the money financed by debt, and it is all of this spending that has made the purchasing power of the euro to fall. How do we fix this? The Mogambo has an answer.

When U.S. Department of Energy analysts told you more than a month ago that gasoline prices would peak at about $4 a gallon around Memorial Day, we told you they were wrong. Gas prices, we said, were destined to head much, much higher.

 In the currency market, the dollar fought back from its session lows but still sank against the euro. Late Tuesday, the euro was trading at $1.5647 vs. $1.5507 on Monday.

Produce Prices Up Modestly; Target Earnings Off the Mark; Coal Shortage in China; Icahn’s Yahoo Battle Gains Support; Whitney Slashes U.S. Bank Outlooks; Sacked Earnings for Saks; Merck’s Vioxx Settlement; Fed on Pause, Says Kohn.

Congress has threatened to take action against speculative commodities traders, as food and energy prices break fresh records.

A desperate Democratic Senator, Claire McCaskill, warned during a Senate hearing on commodities speculators that “the American people are about to take out pitchforks” because of the cost of groceries and gasoline.

McCaskill then told an official from the U.S. Commodity Futures Trading Commission: “If you don’t do something, Congress will,” according to a report in the LA Times.

Of course, it doesn’t appear to have struck the outraged Senator to consider mere market forces such as supply and demand or, in the case of oil prices, increased demand from emerging markets and decreased supply because of bad weather or geopolitical events.

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The core US inflation rate or Producer Price Index (PPI) — a measure of the prices of goods excluding food and energy  — rose 0.4% in April, double the increase forecast by economists.

This puts the core US inflation rate up 3% in the past year, the biggest year-over-year rise since late 1991.

The PPI figures are unlikely to affect the markets which, according to a report by MarketWatch, “don’t seem to trust the government’s inflation figures that show falling energy prices in a world of record crude oil prices.”

You can bet there will be a lot of discussion about interest rates this week, thanks to the release of the producer price index (PPI) report tomorrow (Tuesday) and the U.S. Federal Reserve meeting minutes on Wednesday.