06/30/08
Another week, another record-high oil price. And it's only Monday. Fingers of blame are pointing with more frequency and animation. And still, the game of denial goes on.
Over the weekend, OPEC chief Chakib Khelil gazed into his crystal ball and came up with $170 oil by year's end. His culprits of choice: a falling dollar and "political conflicts," i.e., more saber-rattling between Tehran and Washington.
Well, that's no doubt true as far as it goes, but then the OPEC guys go off the rails when, according to this article, "OPEC ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. OPEC has argued that speculation and the weak dollar are behind the record prices."
Did it escape the OPEC ministers' attention that a rebel attack in Nigeria took 200,000 barrels a day of production offline, zeroing out Saudi Arabia's magnanimous gesture?
Oh, and those darn speculators. OPEC loves to blame them, and has blamed them, going at least as far back as $92 oil eight months ago.
BP chief Tony Hayward is having none of that, calling the notion of speculators driving up the oil price a "myth." More relevant, he told the World Petroleum Congress, is that "supply is not responding adequately to rising demand." But then Hayward goes off the rails when, according to Reuters:
He added that politics rather than geology was the reason.
"The problems are above ground not below it," he said.
Now it's true enough, as Hayward complains, that OPEC nations don't like having Western oil majors like BP working OPEC oil fields the way they did in decades gone by. But the fact oil-rich nations are giving BP less access than they used to doesn't change the fact that the world's biggest oil fields are in decline, and new ones aren't coming online nearly fast enough to pick up the slack. I can understand why OPEC doesn't want to fess up to that reality, but why is Tony Hayward so reluctant?
Dave Gonigam
Treading a fine line between contrarian thinking and conspiracy theory, Dave Gonigam explores the nexus of finance, politics, and the media for Agora Financial's 5 Minute Forecast. He joined kindred spirits at Agora Financial in 2007 after a 20-year career as an Emmy award-winning writer, producer, and manager in local TV newsrooms nationwide.
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“Because he doesn’t want to a) lose his job, or more likely b) have a small private airplane accident in inclement weather. (“It was kind of windy…”)
What about all of the oil we have in this country? Like Alaska, the Dakota’s,Texas, and Ohio to name a few.
At least now we sell some nice weapons to the Mid East and keep our contractors in business.
Maybe Al will come back but with a tighter control over fiscal policy otherwise the China Banks will soon be owning a lot of vacant houses in this country
‘I can understand why OPEC doesn’t want to fess up to that reality, but why is Tony Hayward so reluctant?’
I’d like to suggest that the situation in Russia with BP and TPK (?), and the joint oil venture between them there that is currently unraveling, has much to do with the angle that Tony Hayward is taking. The Russians have been muscling out all competitors in their oil fields, BP is just the latest. No doubt it behooves them all to keep a low profile on the declining state of affairs there too…no doubt no one wants a bright spotlight on that information just now.
The world would erupt into chaos and anarchy if its people truly understood the precipice
edge upon which we are teetering.
Sue Kaufman
Drums, PA