Economic Warfare

[Ski]

Oil specualtion has been a main driver of the price of crude for some time now, but I don't see any maliciousness behind them other than trying to squeeze as many greenbacks out of the market as possible. That leads to the price flucuating higher when there's a storm brewing in the Gulf, or when a small pipeline is severed in Yemen, or the rebels in Nigeria attack a refinery.

Capitalism at its finest.

But I do believe the intent could be there if some smart trader wanted to screw with the West.

Finally, I agree with those who say economic warfare has been around since the beginning of mankind...

[kehenry1]

Just to keep up with realities of Venezuela, though authored by an obvious, anti-chavista, Daniel in Venezuela is a great place to track the internal issues.

He makes an excellent point about what the OPEC members may have thought of Chavez trying to use OPEC as a force for social change when it is imminently an organization bent on economic power.

And this little gem about the reality of "commodities" in Venezuela where everything is price controls and soviet style economics that results in the same: basic goods are missing from grocery shelves.

It's not a one time thing. He and others he has linked to have been reporting on the lack of basic staples for some time. Where is all that oil revenue going? In the pockets of thieves and into projects that have no economic return. Like buying soviet..er...Russian arms and other interesting things.

Cold war revisited.

[wm]

Rather than dig up some international conspiracy to jack up oil prices, there may be a simpler answer here. Oil is, I believe, traded in US dollars. The US dollar is at an all time low in the international currency market. If I have to buy a lot of my stuff in Euros or Yen, then don't I need to sell my oil for a whole lot more $$ these days? Or am I just being simple minded?

[selil]

Rather than dig up some international conspiracy to jack up oil prices, there may be a simpler answer here. Oil is, I believe, traded in US dollars. The US dollar is at an all time low in the international currency market. If I have to buy a lot of my stuff in Euros or Yen, then don't I need to sell my oil for a whole lot more $$ these days? Or am I just being simple minded?

Oil may not be traded on the US Dollar much longer. LINK

[bourbon]

Oil specualtion has been a main driver of the price of crude for some time now, but I don't see any maliciousness behind them other than trying to squeeze as many greenbacks out of the market as possible. That leads to the price flucuating higher when there's a storm brewing in the Gulf, or when a small pipeline is severed in Yemen, or the rebels in Nigeria attack a refinery.

Capitalism at its finest.

But I do believe the intent could be there if some smart trader wanted to screw with the West.

Finally, I agree with those who say economic warfare has been around since the beginning of mankind...

I realize how alarmist I sounded in that last post; I just found it….alarming. The concept and practice of oil speculation is not alarming to me, but the numbers today are. A 60% price increase over six-months, how is that justified by market fundamentals? Gheit is saying there is $40 of risk premium in a barrel; I can understand $15-20, but $40? That’s doing some serious restructuring to the global economic order, and having a significant impact on our balance of payments.

[tequila]

Our balance of payments have been way out of whack for years now, and the high price of oil has little or nothing to do with it. Much of both have much more to do with the rapid pace of East Asian recovery and Chinese industrialization over the past decade than various crises in the Middle East.