Crude oil price increases.
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Crude oil price increases.
How much of this is caused by local (i.e. Wall Street traders) manipulators who need to make a quick profit on their own shares? There was some attention drawn to this possibility during Desert Storm in '91, when there was no shortage of crude oil, whatsoever.
The US receives only a fraction of its fuel from the Middle East, or is this not the case?
The US receives only a fraction of its fuel from the Middle East, or is this not the case?
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Venezuela has contributed to it, saw something a few days ago, but reports like this seem to be taken off line rather quickly...
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Indeed, historically, crude oil pricing has very to do with supply and demand mechanisms, but tends to be driven by political agendas, or plain old crowd hysteria in the trading markets.
The OPEC cartel has traditionally adjusted preferred oil pricing by threatened supply cuts (which are generally ignored by all OPEC members), and Saudi has used oil pricing as a strategic weapon (witness the 1970's oil squeeze). Check out "Foreign Affairs", March-April 2002, for some very good articles on the dynamics of oil pricing and production.
For a deeper look at the oil industry I recommend the controversial book "Hubbert's Peak" by Kenneth Deffeyes. He details the fact that oil prices are more a political dynamic rather than pure supply and demand. However, he does assert that oil prices will continue to rise due to the unrecognised fact that oil production will peak in the period 2004-2008 (based on the precedent that M. King Hubbert correctly predicted the peak in U.S oil production would occur in the early 1970's; first forecast, I might add, in 1956!).
Regarding the state of oil prices today, they have been driven up by a confluence of events with the impending war in Iraq, being compunded with significant political events in Venezuela. The combination of both has severely rocked confidence in hopes of cheap oil in the near future, and the result is a futures market driven rocketing price. Should the war get underway, the educated bet is a short spike in prices, followed by retracement as confidence returns to the markets. However, should George get bogged down in Iraq, the bet is a sustained price of $50.00 until the cessation of hostilities.
The OPEC cartel has traditionally adjusted preferred oil pricing by threatened supply cuts (which are generally ignored by all OPEC members), and Saudi has used oil pricing as a strategic weapon (witness the 1970's oil squeeze). Check out "Foreign Affairs", March-April 2002, for some very good articles on the dynamics of oil pricing and production.
For a deeper look at the oil industry I recommend the controversial book "Hubbert's Peak" by Kenneth Deffeyes. He details the fact that oil prices are more a political dynamic rather than pure supply and demand. However, he does assert that oil prices will continue to rise due to the unrecognised fact that oil production will peak in the period 2004-2008 (based on the precedent that M. King Hubbert correctly predicted the peak in U.S oil production would occur in the early 1970's; first forecast, I might add, in 1956!).
Regarding the state of oil prices today, they have been driven up by a confluence of events with the impending war in Iraq, being compunded with significant political events in Venezuela. The combination of both has severely rocked confidence in hopes of cheap oil in the near future, and the result is a futures market driven rocketing price. Should the war get underway, the educated bet is a short spike in prices, followed by retracement as confidence returns to the markets. However, should George get bogged down in Iraq, the bet is a sustained price of $50.00 until the cessation of hostilities.
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Those are some ugly possibilities, and I just read that a strike might happen in Nigeria. Too bad that it was not a French colony-they might have sent in a fleet of C-160 Transalls and C-130s with the French Foreign Legion, using Jaguars and Mirages for cover.
And so Nigeria is the sixth-largest oil producer!? How large a percentage?
As I commented on in the United (Death Watch) topic, if the US Congress releases a good bit of fuel from the Strategic Reserves, would it either reduce prices in the US by flooding the market here, or could it be sold directly to the airlines at cheap rates, however naiive this viewpoint seems? Better that, than fewer airlines and less competition, in the eyes of the GOP and the purported "laissez-faire" capitalism?
The main problem with OPEC in 1973 and 76 was their reaction to our weapons sales to Israel-and it is the only democracy in the Middle East.
And so Nigeria is the sixth-largest oil producer!? How large a percentage?
As I commented on in the United (Death Watch) topic, if the US Congress releases a good bit of fuel from the Strategic Reserves, would it either reduce prices in the US by flooding the market here, or could it be sold directly to the airlines at cheap rates, however naiive this viewpoint seems? Better that, than fewer airlines and less competition, in the eyes of the GOP and the purported "laissez-faire" capitalism?
The main problem with OPEC in 1973 and 76 was their reaction to our weapons sales to Israel-and it is the only democracy in the Middle East.
