Tuesday, September 28, 2004

Oil - Can't Get Enough Of That Wonderful Stuff

Traders today broke through the US$50/Barrel mark last night, and there's little chance of the price coming down. Four key reasons why -

1; problems in Nigeria for Shell and Agip (ENI), evacuating non-essential staff as security troubles rise
2; Saudi incidents are picking up, flow could soon be disrupted
3; two pipelines (as of the report) had been sabotaged in Iraq, disrupting flow
4; Hurricanes in the Gulf of Mexico inhibiting production and transportation to the US.

It's apparrent that (Standard US. Govt. Disclaimer) "Though Iraq may have been invaded for reasons other than oil security, this was certainly a key objective of it" - troops were fighting to secure pipelines the day before 'Shock and Awe' began, and President Bush declared War. Oil Security in the region was a vital reason for moving into Iraq.

Now one has to wonder, "What Security?" - another record breaking oil trade, reserves dropping to just over 270 Million Barrels, and no guarantee of OPEC suppy, with even Saudi Arabia's 1 Million Barrels/Day of increased production potential unable to meet the losses wrought by the other incidents, especially as Saudi Arabia faces the risks of greater violence.

The current Rublican 'Big Stick' foreign policy isn't paying off for the US. And though supply is falling, demand is still increasing in the US, as no 'conservation' efforts have taken place since Jimmy Carter. not just Republicans to Blame for that one, but they've had 16 years out of 24 to reduce consumption, and it's just not the direction they want to take. Reduce consumption, and growth, for a decade or so and allow alternative energies to catch up? not while china's growing, and especially not leaving the middle east to anyone else - the EU was set to gain for an Iraq with Saddam in power.
posted by Keegan at 11:44 am

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