Libya’s National Oil Corporation chairman Shokri Ghanem put fear into the hearts of commodities traders with his recent statement that $100 a barrel is a “comfortable” price.
Oil, which has been trading towards the bottom of a year-long narrow range of $72-$90 a barrel, rose to above $84 Tuesday and Wednesday.
The current price gives oil producers in the 12-member OPEC organization handsome profits without rocking the world economy into another global recession. The United States is struggling for economic growth following the financial tsunami of two years ago, accompanied by a short period of oil at $35 a barrel.
Oil at $100 a barrel would fuel inflation, already aggravated by sharply higher prices in wheat, cotton, corn and other commodities. However, the weak American dollar, which many speculators bet has a long way to sink, has dropped the “real price” of oil in local currencies by more than 10 percent the last six months.
"We would love to see $100 a barrel," said Ghanem. "We're losing real income. Libya in particular would like to see a higher oil price."
However, Kuwait’s oil minister said he wants a price ceiling of $85, and Iran, which will take over the rotating presidency of OPEC in January, has said that it does not think that the price of oil will spiral upwards.Read more here
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7 comments:
Yep Joe...this is a foregone conclusion. We talked about this. But even more recently it has become apparent that circumstances are unfolding that will cause this inflation to come upon us like a disaster of biblical proportions. The FED is about to buy 600 billion in US debt. With interest. Now you might say that it wouldn't be too bad if we were using that money to pay off debt but that won't be the case. That money will also be used to fund entitlements and other immediate self-induced financial obligations. Soon enough this 600 billion will become 1 trillion - just like the stimulus. All of which will be attached to interest for the FED. With no jobs to create tax revenue, this will equate to an even larger house of cards. The initial result of this cash infusion will be a small bump up in the economy. It will slightly boost consumer confidence and it will "kick the can further down the road". But we will never be able to pay off the debt. The number of jobs created by this "bump" will never be enough to generate enough revenue to pay off the debt. Then in a short period of time we will feel the effects of inflation as this cash infusion, or "economic easing" as it is being called, degrades the value of our dollar. We can look for our dollar to lose about 20% more of it's value within a couple of months. Since OPEC uses our dollar as the basis of oil value, we will see it there first, followed by an increase in the prices of goods and services directly affected by the rise in fuel costs. When paychecks don't go up, the proverbial poop will hit the fan. This is very bad indeed. I just saw Obama on TV say that it was inportant to stop wasting taxpayers money.......on the eve of a trip to be taken by his family and 3000 guests to India and Malaysi to the tune of 2 billion dollars.
No my friend, we haven't yet experienced the impending financial crescendo - but we can see it from here.
The value of the US Dollar is manipulated by the Federal Reserve Bank. The value of all dollar-based commodities are thereby controlled by monetary policy.
Of course the price of oil and everything else will go up. The Fed Chairman, Ben Bernanke has stated publicly that the goal is to "re-inflate" the prices and "get the economy moving upward again".
Booms and Busts are engineered by the Central Bank. This is now becoming common knowledge.
We have plenty of oil in our own back yard screw OPEC !
Here we go, already! Bet the Republicans wanted this story out there! Scare tactics have started already even before their new buddies have been sworn in!
We heard this stuff the whole time Bush was in office and we haven't had high gas prices and reports of high priced oil for some time now but the big boys aren't making as much money, so they've gotta start this stuff again!
Greed has turned this country upside down and will continue to do so if not stopped!
Nuke the opec nations and then take their oil , or our oil , easy solution to a small problem.
if we let them hold us hostage over oil , then sad on us.it's called black-mail in the U.S.
12:25
Get real. I hate using the "i" word, but you my friend are and ignorant person.
I blame all you dummies who just had to buy the biggest SUV/truck on the lot knowing that you aren't hauling materials to the work site or pulling boats but simply want to ride around town and keep up with the Jones's
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