[ale] [OT][Way OT] Industrial Power Question - Further OT - Oil companies

Sean drifter at oppositelock.org
Fri Feb 6 15:54:37 EST 2009


On Friday 06 February 2009 03:21:50 pm Jeff Lightner wrote:
> Arguing about why the base price of oil went up is something else
> altogether.  The oil companies and others will tell you that it was
> "speculators" in the commodity markets.  I would suggest if you traced
> those "speculators" you'd find many of them worked for the self same oil
> companies that bemoan such speculation.

One part of this equation that is not much talked about in international
circles for political reasons is China. It was the 600 pound gorilla in the
room.   Apparently during the runup to the Olympics China was buying oil
left, right, and center in order to be absolutely sure that the Olympics
would not be disrupted by an energy shortage caused by a sudden escalation
of tensions in the Middle East.

The Chinese demand for oil exceeded supply and the price rose to meet
the pressure.  After the Olympics, China almost totally dropped out of the
oil markets as it has so over-bought earlier in the year. That reduced
demand about the same time as the global recession reduced demand and
the price came back down again.
The price rose back to nearly $2 a gallon this winter as the major oil 
companies reduced the output of their refineries here in the US to reflect 
the reduced demand -- and drive up prices.

Sean





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