Monday, October 9, 2006

Lower Oil Prices - Planned Strategy or Coincidence ?

Many Americans believe that the currently low gasoline prices are part of a political strategy to distract voters prior to November elections.   Many people, myself included, believe that there is a high probability that oil prices are going to start rising a week or so before Thanksgiving which is the busiest travel day in the US.  
What Do You Think?
P.S.   Happy Thanksgiving to all of my Canadian friends.
Conspiracy Theories Abound as Oil Prices Fluctuate -
  Washington Post Staff Writer
Friday, October 6, 2006; Page D01
Read the entire story at:
In mid-May with gasoline prices at $2.95 a gallon and rising, 15 percent of Americans listed high fuel prices as their top concern, outstripping terrorism. And much of the public seemed ready to vent its wrath on President Bush and the Republican-led Congress.

By early September, though, with the nationwide average at $2.73 a gallon and falling, only 5 percent of those polled said that the price of gas was the single most important issue, according to a Washington Post-ABC News poll.

Since then, the price of gasoline has fallen even further, now down about 70 cents a gallon from its peak in August -- with only a month before the elections.


A lot of Americans don't think so.

"This has been huge fodder for talk radio," said Tyson Slocum, director of energy programs at Public Citizen, who says he has appeared on about 15 radio shows focusing on whether the Bush administration is manipulating oil prices before the congressional elections.

"I don't think the influence is as explicit as some people out there are alleging.   But all markets are susceptible to politics, and oil is no exception."

Generally, oil experts, executives and traders cite other explanations for the recent steep fall in prices, including the easing of anxieties about possible armed conflict with Iran, the flight of financial speculators, ample oil inventories and softening U.S. demand.  Prices, they say, are the results of decisions made by people ranging from pension fund managers and oil executives to traders and ministers from the Organization of the Petroleum Exporting Countries.  But the roller coaster in oil prices this year without any supply disruption has fueled conspiracy theories about why gasoline prices went up and why they are coming down now.

After seeing a Washington Post report about oil traders closely scrutinizing supply and demand, one reader responded online: "LOL!!!!    Care to wager how soon after the elections a 'catastrophic' event will occur to re-inflate the prices at the pump?????"

CNN anchor Miles O'Brien dismissed the conspiracy talk in a Sept. 25 gabfest.  "Some bloggers are putting those two things together and, you know, this is the grassy knoll group," he said.

"Paranoia is as American as apple pie," says Chas W. Freeman, former U.S. ambassador to Saudi Arabia.  "This is all Michael Moore on steroids."

But politics have always flowed with oil.

Here are some of the leading theories, and some possible explanations, for what is happening in the volatile oil markets.

According to this theory, the Saudi government is doing Bush a favor by trying to bring down prices before the election.

Some say the Saudi government has a long-standing relationship with the Bush family.  They also cite the 2004 book by author and Washington Post assistant managing editor Bob Woodward, "Plan of Attack," which said that then-Saudi ambassador to the United States, Prince Bandar bin Sultan, promised to keep oil production high enough to moderate fuel prices and bolster the U.S. economy during the presidential election year.

Now, with crude oil prices tumbling and OPEC members calling for production cuts, Saudi officials -- at least publicly -- are saying they will wait until the next meeting of OPEC oil ministers, which happens to be scheduled for December.

"OPEC will be meeting I think within a month or two to review these factors, and we will discuss these things with countries like Venezuela and Nigeria," the Saudi ambassador to the United States, Prince Turki al-Faisal, told reporters after giving a speech in Washington on Wednesday.

But oil traders are worried that Saudi Arabia won't wait.

Summarized by Copernic Summarizer


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.