Good morning greenlaw4-7,
A correction is inevitable, but I do not think we'll dip below 115-118 on the OSX before building again.
I believe an important point is often overlooked in the discussion of crude oil prices and the OPEC nations.
OPEC has stated repeatedly their intention to hold crude oil prices in a $22-26 range. The referenced crude is the OPEC basket, which I believe is currently is trading at something less than the commonly quoted West Texas light sweet crude (now at $33).
I know that the Middle Eastern crude (which is often quoted for example, on the Schlumberger site) is a composite Oman/Dubai light sour crude - it currently is around $27 for near-month futures price.
Enough about crude oil prices, I think you get the picture. Anybody out there know where we can reference the OPEC basket price quickly?
To my mind, the politicians, market makers, and now journalists are fanning the flames of another collective conciousness mood swing. Screaming about 300% increases in oil prices this year is neither accurate, fair, nor rational - and if a guy used the same kind of cheap tricks to sell cars, he'd be hauled into court by the county attorney.
We all know that $10 crude was an extreme and momentary aberration, brought about by the same sh*theads who, at the time, were screaming about the world awash in a sea of oil. Remember the missing barrels? Nobody else in a position of responsibility seems to. And now the public spotlight of attention is swinging back to the oil producers, with blame waiting in the wings.
I believe at least part of this unfolding dynamic is a subtle strategy on the part of OPEC to determine (a) just what is the level of stored production and (b) just what is the true consumption of the western world, their biggest market. Not a case of a conspiracy or plot, you understand, more a case of gently applying guidance to a certain building momentum. One way to determine (a) and (b) is to hold production more or less steady in the face of a rising demand until people begin to holler. OPEC manifests enough of the world's consumption to be in a position of sufficient strength for just that. A new concensus is gradually formed as the topic moves upward in the ranks of daily importance, with contributions from governments, think tanks, analysts, and journalists.
All in all, I think it's been as well managed as possible - no abrupt shocks to the system yet, rather a gradual increase in the volume and stridency of the shortfall warnings. Are we in serious trouble in the US? I don't think so, although it's going to take some very hard work to meet demands - certainly a different mentality must replace the current one, at the level of federal and state governments.
Just my two pennies worth.
Regards, to all,
Aggie |
