So in one of my paranoid moments I got to thinking…
OPEC just bounced up crude oil prices thereby raising the price of gasoline in the United States (and elsewhere) by what seems like a significant amount. AND it’s not even summer driving season yet when we can expect to see another spike in prices.
The paranoid part comes in when I put together the spike in prices and the upcoming election.
It wouldn’t surprise me if many of the individuals who run OPEC are irritated at the current administration due to their position on Israel, Iraq, etc. And these individuals have a large influence on the price of crude oil. And these individuals know that a sudden spike in gasoline prices has the potential to arrest whatever economic growth is happening in the United States (and elsewhere) through the raising of the cost of doing business. And I think we’ll all agree that a slower economic growth damages the ability of the current administration to win re-election.
So is this strictly a market move or a ‘plausibly deniable’ attempt to remove from power an administration not favorable to OPEC member states political goals?
None of the above. The price in Oz dollars or in Euros hasn’t changed all that much. It’s only the price in USD that’s gone up significantly. The USD went down the toilet. That’s the effect you’re seeing.
That was definitely the case until February when a) the USD bottomed out (for at least a bit) and b) OPEC started getting more serious. And it remains a big part of the total increase. But the recent increases have been different. As a result of better discipline and the announced production cutbacks, oil has been increasing at a pretty good clip in EUR, too. Brent went into February at EUR24 and got as low as EUR23, for example, and got up over EUR 28 in March and trades there now after an intermediate dip.
As for whether the reason is that OPEC is trying to influence the election? I was and am pretty dismissive of conspiracy theories about oil and Bush on the “benefits Bush” side, so I’d want to see a lot more evidence than “they don’t like him” before I bought into a conspiracy the other way. Personally, I think the Saudis and some of the other countries are just tired of losing money and terrified of what might happen if their citizens actually have to go out and get a job. Other countries, like Venezuela, are tired of their citizens not having jobs – they just moved for a band increase yesterday (that one is, at least ostensibly, because of the dollar).
The OP doesn’t refer to a conspiracy, but to individuals. OPEC is not a monolith, and members vote the way they do for various reasons. I doubt all or most of them were seeing things the way the OP suggests; OTOH it’s naive to think that it didn’t cross the minds of some. How much it influenced their decision we’ll likely never know.
While I don’t have a reliable cite, it is conceivable. If you take a look at the OPEC member nations; Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela, one could certainly be suspicious of the motives when it comes to US politics and Iraq. Conspiracy theorist are attempting to build a case that the muslim nations are trying to tip the scale in favor of a Kerry administration (no I’m not going to bother linking to any of their sites - they are easy to find if you google). On the other hand reductions in production simply result in a higher per barrel price on the market (and I don’t see the non-OPEC oil exporting nations increasing their production to drive the market price down - why should they?).
Speaking of barrels, it’s a nice one they have us bent over. Just stick it in a little deeper…
However, when looking at the gasoline price at the pump we must also look at the limitation we have placed on ourselves by not allowing additional refineries to be constructed. From what I understand, the bottleneck is not the supply of crude oil it’s our refining capacity that drives the pump price up.
There’s another issue in the recent gas hikes. Some states have mandated the use of special gas formulations. As a result, refineries in one area cannot produce gas for use in others. So when there are shortages of refinery capacity in one state, the slack cannot be picked up by others. The result has been gas shortages and price increases.
I saw this on 60 minutes. If this is true, then it’s truly despicable. If Bush is allowing the Saudis to charge whatever they want for oil as long as they reduce it before the election, then this is far more serious than any previous charge alleged against this adminstration. He’d be allowing a country that finances terror to exploit and profit the country as long as he can make political gain out of it.
I haven’t seen many other news sources pick up this story. Hopefully people will pay attention to it.
Hell of a story. I remain a tad skeptical. Firstly, I’m not convinced the Saudi’s could unilaterally lower the price of oil, not without pissing off everybody else in OPEC. Sure burn a lot of diplomatic capital to save GeeDubya’s butt. And its not like nobody would catch on.
More likely this Prince Bandaid guy was blowing smoke, figuring a) if prices go down anyway, they can claim credit from the Bushiviks and b) if prices don’t go down, they’ve stll got some months to figure a way to weasel out.
Besides, for the Saudi point of view, it makes perfect sense, I certainly can’t blame them for wanting GeeDubya rather than Kerry. Most likely, they have expressed that warm regard in thier usual fashion, in cash.
But do they want him, need him enough to throw thier weight around and make some more enemies? How far would they be willing to go? Most people tell me the Saudi Regime is tenuous on a good day, they’ve been on thin ice so long they may as well tap-dance. Trouble, they don’t need. The guy who can’t swim doesn’t rock the boat.
So while I don’t doubt that it happened, its most likely no more than an air kiss and a “lets-do-lunch”. Half a chance Bush saw nothing wrong with it, just a sincere expression of solidarity and support from like-minded champions of justice. The Saudis, that is.
Sure, the Saudi’s want GeeDubya to stay. But they are, how shall we say, risk averse. Even if they thought it was worth it, I doubt they’d have the stones.
So several of you don’t think that one man like Bandar could influence his Good Ol’ Boy system to reduce oil prices, while one man like Bush influenced his Good Ol’ Boy system to take the the free nation of the USA to war?
Let’s keep in mind two things, people. First, Saudi Arabia is a member of OPEC, but isn’t acting according to OPEC’s wishes.
Second, Mr Bush’s supporters were last month hammering Mr Kerry for the alleged influence of foreigners in the presidential election. And now we have evidence that Mr Bush’s campaign is being helped by foreigners.
I’d call this hypocrisy but it seems pointless; nothing seems to stick to this man. Words generally fail me when it comes to my contempt for the man occupying the presidency.