What is a surprise is the total docility of the Democratic Congress,
which seems to be on a permanent vacation until after Labor Day 2008,
when these stumblebums will put away the booze, whores and pills and
start to run for reelection as defenders of family values (just like
their Republican counterparts).
By then, Iraq war profiteers like Senator Diane Feinstein (whose
husband has made over $50 million in 4 years from Iraqi construction
contracts Feinstein gave his construction companies when she chaired
the Senate military construction subcommittee) will now be able, when
she retires, to buy a big yacht like her super rich southern
California friends. In a century, we have gone from merchants of
death like Basil Zacharoff to politicians of death like war profiteers
Feinstein, Cheney and the entire Bush family.
No wonder the Bush administration ignored warnings about Osama attack
plans in early 2001. A few thousand dead Americans are a small price
to pay for $100 barrel oil.
Heavy Price Of $100 A Barrel Oil
If the price of crude stays this high for a year, it would cost the
British economy £18bn
Terry Macalister and Ashley Seager, The Guardian (UK)
Friday January 4 2008
Britain could see an £18bn hole blown in its national income if oil
prices remain around $100 a barrel for a sustained period, with the
high price leading to soaring energy costs for private consumers,
industry and public services.
Calculations by a leading research consultancy, Capital Economics,
suggest the UK could lose up to 1.5% of its gross domestic product,
with half of this coming from higher domestic fuel bills, meaning
consumers have less money to spend on other goods and services.
Npower is expected to announce double-digit increases in gas and
electricity prices today and motorists have been hit by record petrol
prices, adding to a squeeze on incomes from softening house prices and
higher credit costs.
Oil rose above $100 a barrel last night for the second day in a row
after figures from the United States - consumer of a quarter of the
world's oil - showed a larger-than-expected decline in crude oil
The price has also been pushed upwards in recent days by violence in
Nigeria and Algeria and fears that colder weather in the US will lead
to a shortage of heating oil.
The headline price of oil is also being distorted by a weakening
dollar, in which the commodity is priced. When the price of the
greenback falls, oil producers try to push up the value of their
products to compensate. So though the price of crude increased last
year by 57% in dollar terms, the growth was barely 40% if measured in
terms of the euro, for example.
But the recent fall in the value of the pound against the dollar means
surging oil prices will hurt British consumers and firms that bit
Oil prices have been rising since the turn of the millennium, as the
world economy has enjoyed its strongest run for decades, pushing up
demand from energy-hungry economies such as India and China. Some
analysts, and many Opec countries, argue that financial speculators
are the principal culprit behind the rise in prices.
Fadel Gheit, oil analyst with the New York brokerage Oppenheimer & Co,
told a US senate committee before Christmas that at least $40 of the
$100 should be attributed to market hype and speculation. Few doubt
that some traders are buying oil as a hedge against a falling dollar.
Certainly this betting on rises and falls in the markets has increased
volatility but oil prices have always been affected by political
uncertainty, whether that be the threat of disruption to production
facilities by armed bands in the Niger delta, for instance, or fears
of military action by the US against Iran over its nuclear programme.
But even wider political uncertainty - such as the assassination of
Benazir Bhutto in non-oil producing Pakistan or the political turmoil
in Kenya - is enough to send oil prices racing, as they did over
Kris Voorspools, analyst at Fortis Bank in Brussels, insists a
shortage of the right kind of refining capacity coupled with
increasing demand will keep prices high. "Oil could rise further from
here. It's simply supply-and-demand fundamentals," he argues. It comes
at a time when the UK North Sea is already in faster decline than oil
companies expected and Germany's Energy Watch Group is predicting that
global supplies will fall sharply from 2009 (see box).
Against him stand the likes of Gheit, who pointed out last night that
forward prices were already lower than current prices - a phenomenon
that strongly suggests the longer-term direction of values must be
"A recent consensus of US, British and French analysts on Wall Street
had the average 2008 oil price at $73," he said. "That means we will
need to see prices falling to $46 at some stage and underlines my view
that we are heading for a relative meltdown, not more higher prices."
The rising cost of oil - from an average of over $50 in 2005 to more
than $60 in 2006 and $72 in 2007 - has gradually pushed the price of
petrol up on the forecourt. This week the average cost of an unleaded
litre in the UK hit a new record of 103.3p and, given the traditional
time lag between wholesale crude and refined petrol going up,
motorists are bound to feel more pain in future.
Many airlines have already imposed fuel surcharges on their ticket
prices to try to recoup some of the extra costs, with British Airways
warning recently that it is poised to spend a record £2bn on aviation
fuel over the next 12 months.
The higher cost of oil - and fears of future shortages - should
trigger a faster drive into renewables and other alternative fuels,
especially at a time when governments are committed to reducing their
But though the relative cost of wind and solar look much more
attractive when measured against $100 oil, much of the extra
investment by energy firms has gone into hitherto uneconomic
hydrocarbon reserves, such as Canada's tar sands.
Sweet Sue wrote:
Americans have no memory.
> > Remember when king george said that the war in Iraq would keep oil
> > prices down ? LOL
> Americans have no memory.
Main problem: What oil that Iraq produces is going directly to the military
and never leaves the country.
"Those who would give up essential liberty to purchase a little temporary
safety deserve neither liberty nor safety." Benjamin Franklin