Comments on: Saudi handouts ratchet up “fair price” of oil Mon, 26 Sep 2016 03:26:00 +0000 hourly 1 By: American213 Fri, 17 Oct 2014 14:53:44 +0000 dilbert_g well said!

By: dilbert_g Fri, 22 Apr 2011 00:25:07 +0000 re: blaming Federal Reserve vs. Saudis.

For obvious reasons, it’s politically feasible for western oil retailers, investors, and politicians to blame “the Arabs” in public. They did the same in 1973, when Kissinger used “shuttle diplomacy” to drive up prices. I’m no fan of Saudi religious police and cultural repression, but right wing religious kookery is another issue.

Several researchers (aka “conspiracy theorists” in today’s parlance) pointed out that crude oil is priced in New York and London, not in the Middle East. Note the price is based on the phantom Brent Sea Crude stock, not the Saudi-based sweet crude that is actually being produced and sold.

During the price spike of 2005-6, Antonia Juhasz pointed out that the world and the US in particular was facing a GLUT of oil supply, and William Engdahl estimated that 60% of the price was purely speculation in “paper” oil futures, although that could only be estimated because deregulation also eliminated transparency requirements in speculative “dark markets”. So the public was not permitted to have information on supply/demand. Accurate information is a fundamental requirement of ideal capitalism, vis Adam Smith.

It was confirmed that the actual oil market was slack, not tight, when Bush “asked” the Saudi leaders to pump more oil in exchange for nuclear technology (ironic, considering the Iran hysteria). Saudis publicly told Bush “No” in a kind of ambiguously-diffused statement that sophisticated western leaders use to coat slippery political talk, but basically stating “we’re already pumping enough to meet real market demand, your price issues ain’t our problem and we ain’t gonna fix your problem by pumping more oil into above-ground storage”.

Speaking of transparency and what “the President should do” about Fed policy, key players such as Geithner, Bernanke, and Greenspan have all stated in interviews that the President and Congress must have NO INPUT on Fed policies. Greenspan specifically said the President’s relationship with the Fed chief should be “Nothing”.

This argument goes back to the original Jekyll Island crew that formulated the Fed (due to citizen outrage over gold hoarding and the silver movement) specifically to separate financial policy from “politics” via a pseudo-govt agency. Of course, central bank policy *IS* political, but the point is that the general public must have no access to influencing US/global financial and economic policy decisions, particularly via democratically-elected officials. Instead, the private club of Wall Street/Washington bankers and their revolving-door experts must be allowed to make decisions in isolation from all public political pressures, other than the pressures of their key constituents, other private profiteers on Wall Street. That viewpoint has been clearly reiterated, several times since the 2007 meltdown.

So how’s that working out for everyone?

By: fred5407 Tue, 19 Apr 2011 21:49:58 +0000 When geothermal energy comes into its own, and when a new method of storing and transporting energy is developed the oil barons will have to take what they can get for lubricating oil and for operating oil power engines during their useful lives. It will happen, and the rush to raise prices will just hasten it along.

By: marusik Tue, 19 Apr 2011 17:06:18 +0000 It’s just plain pathetic that one of the variables to determine a “fair price” has to depend on the Saudis unwillingness to rein their outrageous spending…

By: limapie Tue, 19 Apr 2011 15:05:00 +0000 This was well written and very thought provoking.

So if all this price rise stays at elevated levels, maybe, maybe, finally, finally the USA will get their act together and change their dependency on oil. I’ve been waiting since the 70’s, when the USA first woke up to their
being dependent.

You said it, “…provide incentives for developing alternative fuels.”

Yippie!!! The world environment thanks the Saudi’s!

By: ugg Tue, 19 Apr 2011 04:11:34 +0000 Dick Cheney misinformed the King as to how the theory of; “what the market will bear” works.”What the market will bear” on products of which are not the necessities of life, works just fine. It is a very good way to set prices with comparable products of (desire). When it comes to the necessities of life, if you use this theory to excess, you choke the consumer and when the consumer realize this high cost is from unnecessary greed and is probably a permanent price increase, the consumer will look for a more economically feasible and dependable product of replacement .Once this trusting supply relationship is damaged and the consumer looks for, and finds a economically feasible and dependable replacement, the consumer can now say to the supplier; now the monkey is on your back. At this time the consumer will have a new product economically feasible and a supply fulfillment to satisfy their needs for many years to come with his old supplier left to care for other customers.