With oil prices falling to as low as $10 a barrel in 1998, rising to $72 in
2007 and now hitting $139
on Friday, what is happening? Forecasters are now saying that oil may break
over the $200 per barrel price barrier before the end of the year. Will this
bubble never burst?
Sure it will, but in the meantime everyone is laying blame on someone
UK Prime Minister Gordon Brown blames the Organisation of the Petroleum Exporting Countries,
OPEC. What a load of baloney. OPEC were responsible for price-fixing and
shorting production in the 1970’s, which caused the last crisis, but now these
countries produce only about 4 in 10 barrels. If anything, OPEC has tried to
maintain fair pricing for the past three decades, rather than fixing.
OPEC therefore blames the Federal Reserve’s policies on the dollar in light
of the credit crisis. Did Greenspan and Bernanke mess up this badly? Some would
say yes, as the price of oil bounces unendingly upwards on each day of bad news
USA. Friday’s spike up was caused by the sharpest one-month rise in American
unemployment rates since 1986.
But then the Fed and other investors, such as George Soros, blame speculators and hedge funds. Everyone’s trying to make a
quick buck out of commodities such as oil and gold in light of the credit
So who’s right and who’s wrong?