AFRICA'S HUGE CRUDE RESERVES THREATEN OPEC'S POWER

WALL Street is quick to react to every gasoline refinery that has to shut down and every ill wind in the Caribbean that might cause a disruption in energy supplies.

That's because speculators predominantly have huge and very lucrative bets on the price of oil and gasoline rising in price.

I'm going to tell you the side of the story that the speculators don't want you to hear - the tale of huge amounts of oil being discovered right now in some remote corners of Africa.

Last December I happened to be traveling through Uganda in East Africa when I chanced upon a guy named Daudi Migereko, the oil minister of that poor country.

Migereko told me exclusively in an interview back then that the oil fields discovered just months before in his country "are going to be really big fields based on what they found in (neighboring) Sudan and what we are finding in Uganda."

I published the energy minister's remarks in columns on Jan. 9 and Jan. 11, the latter of which also had Migereko indicating that he might not join OPEC, the Middle East oil cartel, if the discoveries were the size he believed they were.

Guess what?

Migereko wasn't full of it. And right now excitement over the oil finds in Uganda, the Sudan and even in the Congo could kick conventional wisdom about scarce petroleum reserves in the heinie.

Tony Eccles, an analyst with Investec Plc in London, says reserves of 250 million barrels have already been found in Uganda and "that's just the tip of the iceberg."

"It's an exciting play," he says. So exciting, in fact, that the stock of London-based Tullow Oil Plc, which is exploring in Uganda, rose 3.5 percent one day last week because of the discoveries.

Eccles says that three key Ugandan wells that will be drilled by the end of the year are showing close to 1.5 billion barrels of oil.

"People are finding more and more. And the oil ministry there thinks they will find even more," says a source close to the U.S. Energy Information Administration.

And not only in Uganda but also in the whole area adjacent to and under Lake Albert in an area called the Rift Valley that geologically is shared by the three African countries.

"There appears to be quite a bit of oil," says the EIA source.

Curious then, isn't it, that we've heard so little about these discoveries in this country.

It's true, of course, that we don't pay much attention to Africa, unless it's the version portrayed in a Disney movie.

But you'd think that an oil discovery that could put OPEC in its place might get a little more attention in a nation like ours that gloms oil like no other.

While it's much too early to know for sure, the experts are guessing that the oil deposits under East Africa won't be as large as those in the Middle East.

But they don't have to be to change the price structure for world oil.

The new African discoveries are only part of what could bring the real price of oil down in years to come and the speculative price down right now.

Also important are the technological advances that could make it more profitable to wring oil out of Canadian tar sands - deposits that could rival the Middle East.

The key to oil pricing, of course, is still on the demand side.

While the world doesn't seem inclined to drive less, advances in car engines - hybrids as well as hydrogen-powered vehicles - are making inroads without even much government help.

I do find it curious that energy speculators have had to change their tune in recent months.

Nowadays you hear very little about a shortage of oil - mainly because it's so ridiculous - and more about the world's lack of ability to refine oil into gasoline.

And yet there is plenty of gasoline sitting in tanks, so refining doesn't seem to be an issue either.

I'm curious what the folks who are trying to keep gasoline prices high will do if Uganda, Sudan and the Congo suddenly decide to open refineries of their own?

My guess: They'll probably just try to ignore the important news coming from that part of the world.

And so far the bad guys have been pretty successful at that.

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As the stock market got clobbered yesterday because of the Bear Stearns sub-prime mortgage fiasco, the big question is: who is dumber?

Is it the gullible people who took out mortgages to buy homes they couldn't afford just because interest rates were low?

Or are the really dumb ones the brains on Wall Street who decided that these less than prime mortgages were really good investments.

It's one of those tree-fall-in-the-forest puzzles, so don't bother answering.

Unless someone re-liquefies the housing market so people can sell their homes there is plenty more trouble ahead.

My solution: Allow people to use retirement money to purchase a home without incurring a tax penalty