The price per barrel went over $120 - a new high - and closed at $119.97. Last week's sell off was short lived and buyers jumped on whatever news they could find, which is pretty much the same as any other day. It's going to test the $120 mark a few times but unless the demand eases and suddenly the world has great news in the oil regions, get used to more increases. Add to that Bernanke's Wall Street loving rate cuts (which never quite reach beyond Wall Street, in a good way) and you have this.
Those Republicans sure were right on this. Ha ha, look at those ridiculous people who talk about conservation. They're tree hugging goofballs who want to drive silly little cars. Errrr, nevermind. Mission Accomplished.
The important point that jumps out in this video exchange is that the fundamentals are there to support a steady increase in the price of oil. The world has not yet hit a price high enough to have enough of an impact on pressuring consumption. CNBC flashes a chart showing per capita oil consumption and the US numbers are not even close to anywhere else.
The Republicans and Bill Clinton made it easy for Detroit to promote gas guzzlers and energy conservation efforts were pushed to the side and labeled as kooky. The other interesting comment is when Boone Pickens - a billionaire oil trader and not a failed businessman like Bush - says "there are plenty of refineries around the world." This is from a Bush supporter and a very conservative Republican, contradicting what the GOP rolls out almost every day when giving their newest excuse for high oil prices. Bush is correct that there are no easy fixes for the problem, though blaming everyone else for problems the GOP created is just the usual "I didn't do it" spin that we've seen since the beginning.
For everyone who boldly stated that the weak dollar would never have an negative impact at home ought to be eating their words about now. Sure a weak dollar can mean better exports for the US but for just about everything else, costs are going up. Republican policies including the war, the deficit, the tax cuts and a pro-business (at the expense of consumers) policy have all added up to create a headache for Americans both rich and poor. Add to this list the increasing problems due to the biofuel craze and you have a serious problem that will not be corrected by a simple action or two as both McCain and Hillary are suggesting.
Obama may not be saying the popular thing when he argues against a temporary tax cut on gas but it's the right thing. McCain and Hillary, who both supported the Iraq war, haven't explained where the money will come from for such a big tax cut nor have they or anyone else explained the financial consequences of the Wall Street bailout. (The bailout continues to be the 800 pound gorilla in the room that remains untouched by Democrats and Republicans alike.) Someone needs to start acting like a grownup instead of telling voters how easy answers are going to magically cure years of bad policy.
Don't think the dollar's decline affects you since you don't go to Europe? Think Again. Chris posted earlier today about OPEC and the price of oil, and buried in his post was a fascinating quote from the head of OPEC:
"[E]ach time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa"
The dollar has fallen 30% versus the Euroe since April 2003. That would mean a $120 rise in the per barrel price of oil. Now, oil is at $120/barrel, and oil was around $30/barrel in 2003, so the formula isn't perfect. But that means the real increase was $90 versus the predicted $120. That's pretty darn close. The overall point is that the head of OPEC just said that George Bush and the Republicans' economic policy vis-a-vis destroying the dollar (they don't care if the value plummets because "it's the market's doing") has led to the majority of the oil price increase. I.e., you're paying more at the pump because of George Bush and the Republicans.
It's not very comforting that $200 per barrel is even being discussed but unfortunately, the OPEC president isn't the only person kicking this idea around.
He added: "The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
He added that: "If this (the dollar) strengthens by 10 percent, it is probable that (oil) prices will fall by 40 percent."
If the U.S. economic situation improved from now to the end of the year "that would help the market to stabilize."
Hillary's saber rattling with Iran has helped push oil prices up along with the normal daily issues. How much more misery does she think average Americans can withstand? With a $100 million in the bank, she might not notice the price of oil but everyone else does. Do we really need this kind of aggravation?
Another new low for the oil industry and as we have come to expect, the Bush administration. Let the damned oil companies pay the compensation to the victims families if they want the business so badly but it is sickening to watch the oil industry dictate our foreign policy. So tell me who loves America and who hates America?
One by one, top executives of American oil companies met privately over the last year with Libya’s leader, Col. Muammar el-Qaddafi, often in his signature Bedouin tent, as they lined up contracts allowing them to tap into the country’s oil reserves.
But now, the new allies are working Capitol Hill, trying to weaken a law that threatens those deals. The Libyan government, once a pariah, and the American oil industry have hired high-profile lobbyists, buttonholed lawmakers and enlisted help from the Bush administration, all in an effort to win an exemption from a law that Congress passed in January that is intended to ensure that victims of terrorist attacks are compensated.
More problems in Nigeria, Russia producing less oil, the weak dollar and China's demand shot up 8% from March 2007. In other words, same old, same old. And the dollar has hit an all time record low, trading at $1.60 to the Euro. Absolutely shameful.
It gets worse by the day and we're in yet another weird range. There were a few new incidents today but let's be clear, there will always be another incident. Whether another problem in Nigeria, a hurricane, a whatever, it's always going to be there. The US will keep buying more oil just as China will keep buying more and more oil.
All of this was predictable but the Republicans all made a big joke out of it, dismissing the seriousness of energy independence until we arrived at this period where too many other issues have spiraled out of control such as the fall of the US dollar. It's a good thing voters fell for the Republican propaganda of mocking Democrats on this issue. How's everyone feeling about that now?
It's a good thing the GOP made 'conservation' a dirty word. Oil tested the $117 support level and went up to $117.05 though it has since backed down.
"No," said Chakib Khelil, who is also Algeria's Energy and Mines Minister, when asked by reporters whether OPEC would raise production. "I don't think that any increase in production will have an impact on prices.
There is a balance between supply and demand," he said, speaking during a visit to Kuwait. "Even if we raised the production we may not find a buyer," Khelil said.
He added a previous output increase had failed to bring prices down.
"We raised output last year and there was an increase in prices not decrease." A falling dollar was a main factor behind the surge in oil prices, he said.
The people who won are now being rounded up by Mugabe. It's no wonder the opposition leadership is staying outside of the country. What is it going to take for Thabo Mbeki to realize that his 'quiet diplomacy' is a failure? Robert Mugabe never shies from using violence and detention yet Mbeki stays quiet. He should be ashamed of his actions and turning his back on the people of Zimbabwe who are suffering from the dictatorship. The people of South Africa including others in his own party as well as dock workers all see the obvious, but not Mbeki. His 'quiet diplomacy' defies all reality, much like his weird beliefs on AIDS.
The latest new on the Chinese weapons ship is that it's headed to Angola. The people of Angola are among the poorest people though the 'communist' leadership is among the richest in the world courtesy of oil money. Naturally the Bush administration promoted Angola to a high trading partner level a few years ago despite no sign of the government investing anything in its people. I traveled along the border of Angola a few years ago and was shocked at the extreme poverty of its people. The country is littered with land mines so they can't safely farm and the ocean fishing rights have been sold to the EU so they can't fish. Something tells me this is a government that won't say 'no' to supplies of military repression for a fellow dictator. Isn't it time the US speaks out on this with it's special trading partner or is oil too valuable? After all, they're just people in Zimbabwe and how will they help fuel our cars?
A warm welcome to yet another record high with oil prices. I'd say it's safe to say that the $115 support level has been thoroughly tested and it folded faster than Iraqi troops in Basra. Oil closed at $116.79, with $120 looking like an easy target. See what happens when you let industry choose the energy policy of a country?
There is something so wrong about the recent surge from the Dow which celebrated 9,000 job cuts from Citi just after 3,000 from Merrill Lynch. Strange days, though strange days tend to meet reality sooner or later. I'm thinking sooner.
This ought to be a real boost to the pro-war crowd in Congress and McCain who keep telling us we need to stay for 100 years. If the Iraqi troops don't want to stand up, why should US troops or voters support the ongoing war? Let the GOP and their Big Oil friends fund this fiasco or ask Iraq to use their oil wealth but enough is enough.
A company of government troops abandoned its positions in Sadr City when the forces came under attack from Shiite militiamen who took advantage of a sandstorm to attack, police said Friday.
The clashes overnight killed two people and injured nine, a police commander said. The officer, who spoke on condition of anonymity because he is not authorized to release the information, said it was unclear whether there were any casualties among the soldiers.
The reports of the latest setback for the Iraqi army come after government officials acknowledged that during fighting last month against Shiite militias in the southern city of Basra, more than 1,300 Iraqi soldiers and police deserted or refused to fight.
UPDATE: Oil tests $115 again, going as high as $115.45 before backing off, though still remaining above $115.
Fortunately it backed down (at the moment, it's $114.74) but with the dollar hitting new lows against the euro, yet again, there's not much out there to prevent oil from breaking through $115 and holding above that level. The Federal Reserve is increasingly pessimistic on the economy though it could be argued that they are only now coming to grips with reality.
The Fed has backed itself into a corner with slashing rates to prop up the biggest sinners from the housing crisis and take a guess who will yet again pay the price? Aren't you glad billions (or even trillions) of Social Security money weren't handed over to Wall Street? Can you imagine? It's no wonder the majority of Americans blame the GOP for this financial situation.
Oil hits a new high today and closes at $113.79 after testing $114. We're now in a no mans land and it's not going to take much to test $115. Gordon Brown and Bush can groan all they like but they should have thought about the consequences of invading Iraq and promoting conservation long ago. Since the US and UK invaded Iraq the cost of oil has gone through the roof and it's not going to ease up just because two leaders of two countries that the oil producing countries detest have a public temper tantrum.
Unfortunately it's the same old story. The weak dollar, high oil prices and a stumbling economy are taking their toll. Add to that the ongoing problem of stagnating income for the bulk of Americans and it's the 1970s all over again. As long as you don't need to buy food or use oil products, everything will be fine.
Not to worry though because we will probably never again see any more disruptions from hurricanes or whatever, nor hostage situations in Nigeria, new military invasion of an oil country or anything like that and the emerging economies of China and India will likely be reducing their demand. Oh, I almost forgot the other CNBC classic, that one trader wanted to be the first person to touch $100/barrel, but it was all just a gag or a bet between traders. Nothing more than that. Sounds fair enough and why shouldn't we believe them?
What's that? Oil hit $112.48 and we're now looking for the next support level at $115? Won't the strong dollar help? Nevermind.
Great energy policy by Bush and the GOP. Conservation was for liberals and not macho Republicans and now look what we have. Who ever could have seen this coming? Dick Cheney talked about the "resilient" US economy only a few months ago but like all of his bold predictions, it missed by a mile.
It's hardly a surprise considering all of the other areas of corruption and missing millions and billions. So far for each story of failure and missing money, the result from the Bush administration (and Congress, for that matter) has been a shoulder shrug. We continue to throw money in to that pit, allowing Republican talking points to dominate the discussion and rule the day. Somehow, we expect a different end result despite no evidence that suggests anything has changed. If the administration is afraid of taking action, why would Iraqi ministers change their behavior? Either way, as the bill for the Wall Street bailout hits home, American opinions on more spending in Iraq is going to change. When the question is bailout at home or bailout of Iraq, who do you think Americans will choose?
As middle class people in wealthy countries such as the US and Europe already know, the cost of food has skyrocketed in the last few years for a variety of reasons. Sure, some of that has to do with crop failures related to bad conditions though the more serious problem has been related to diverting food to biofuels (where the money is better) and the increasing cost of fuel, that has risen dramatically since the war mongering and invasion of Iraq.
For decades Republicans in the US have preached a tough-love approach to foreign aid but while this simplistic response appeals to a certain crowd in America it ignores the realities of the world around us. For example, a substantial percentage of the population across southern Africa eats mealy-meal, which is cooked corn meal. If they are lucky, maybe they will be able to afford a sauce to splash on this. This is what people eat for breakfast, lunch and dinner if they can even afford three meals. This is it. All of the extras that we're used to just don't exist as an option on a regular basis. With over one billion people around the world surviving on $1 per day, cost increases for basics such as corn and wheat have an enormous impact. It's really time to step back and look at where we are and how we came to this situation.
