OPEC's finger of blame

Maybe OPEC ministers are smarter than I've been giving them credit for.

For months, they've been blaming "speculators" and "geopolitical tensions" for the persistently high price of oil.  But this week, as oil reaches within a hair of $106, OPEC ministers meeting in Vienna have come a little closer to the truth as they defy entreaties from That Man in the White House to goose production:

Chakib Khelil, Algeria's oil minister and OPEC's president this
year, said Wednesday that the high price of oil was due not to a lack
of supplies, but instead resulted from the "mismanagement of the U.S.
economy" that has helped send the dollar tumbling.

"If the prices are high, definitely they are not due to a lack of
crude," Khelil said in Vienna. "They are due to what's happening in the

Khelil's comments in the IHT reminded me of an interesting chart published at the start of this year in the 5 Min. Forecast.  It shows the price of oil measured in dollars, pounds, euros, and gold.   Measured in gold, the price of oil is up a paltry 9% since 2000.

The IHT article helpfully reminds us that the U.S. president's pleas this week sounded very similar to his campaign rhetoric back in 2000.

"I would work with our friends in OPEC to convince them to open up the
spigot, to increase the supply," Bush said at the time. "Use the
capital that my administration will earn, with the Kuwaitis or the
Saudis, and convince them to open up the spigot."

Political capital?  Financial capital?  Whatever he meant, it's something he no longer has… if he had it to begin with.

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