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Edited on Fri Mar-27-09 11:54 AM by Javaman
So as we enter the spring then summer months, does the price of gas matter to you like it did last summer?
We are living in a depressed economy and as a result, people drive less, so the demand for gas is down.
But haven't you noticed that recently, the price of gas is creeping up? Why is that?
There is actually a small glut right now. Nations are buying up the "cheap" oil and storing it for the future. I find that really funny but more on that later.
The oil producers, the ones that actually pump it from the ground, are feeling the pinch. Saudi Arabia, for the first time in it's oil based economic history is running a deficit. Boo hoo for them, right?
The oil corporations, even though they still make sick amounts of money each quarter, are too feeling the pinch. They painted themselves into a shareholders corner. They want to continue to rake in the record earnings but how do they do that when people are just not buying? The cut refinery output, that's how. And the result is, the price at the pump goes up.
Currently, there is a huge futures market at play in the shadows. Nations are buying up as much oil as they can. Filling up there strategic stock piles, filling up tankers and letting them sit off shore for hopes of monetary glory, and still more nations are continuing to buy up various drilling, pipeline and deep-sea contracts hoping, no, depending on that oil sky rockets once again. (on a side note, this kind of stock piling is amusing, it's not like saving seeds. once the oil is gone, it's gone, all it does is delay the inevitable)
We will see, $150+ barrels of oil once again, but I don't think it will be this summer. But I do believe that those who stand to make a fortune on top dollar oil are also hedging their bets. OPEC is trying all they can to cut output but it at odds with nations that depend on that oil revenue to balance their budgets. So they try and raise the price, but since the demand is low, raising the price will only lower demand. So what to do?
Threaten the world with a new currency? will that do it? It was mostly laughed off by the rest of the world. The main reason for the new currency proposed by Russia and China (the new co-dependant relationship coming to a theater near you), because neither the ruble or the yuan have the economic strength to support such an idea. How about the Euro? They are a power house, but right now, even as bad as the economy is in Europe, the last thing the EU wants is to be tied to a dwindling resource. So the idea is floated and it sank. This will come up yet again, but not this year.
So with all these very weird, unknown bizarre chess pieces in place, what will it take for the oil producing nations to get oil to sky rocket again and for the long term?
do I need to fill in the blanks?
The world as we know it, is so interconnected that even the smallest of incidences would cause oil to jump in price.
I personally fear that as nations try to move to alternative forms of energy, the likely hood of "an incident" goes up. The nations that have enjoyed oil based economy are nothing more than over blown crack dealers. And when a crack dealers territory is threatened, very ugly things begin to happen.
So I ask again, does the price of gas matter to you like it did last summer?
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