Saturday, April 29, 2006

The Phony Rationale for high Oil Price

==> The Truth About Political Stuff <==:

Joel Peskoff deconstructs the Motley Fool explanations for skyrocketing Oil Prices:
"In a traditional market, speculators gamble. They’ll either be right or not. In this market, speculators aren’t gambling, they’re controlling the market and oil suppliers are all too eager to enjoy the higher price. If OPEC wanted to bring prices down, they merely would have to sell oil at the spot price of $50 per barrel and the futures speculators wouldn’t be able to cover their margin calls. But neither OPEC, nor any other supplier has any interest in doing that.

(. . .)

In summary, there really isn’t any rational reason why current oil prices are rising, except market manipulation by speculators. This is not to say that there isn’t a long-term energy problem that needs to be addressed. Eventually, the world will run out of oil but the current oil pricing is not causally related to that fact. In the short-term, there is plenty of oil. "


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