There he goes again. Our clairvoyant and sage Saudi oil minister Ali al-Naimi proclaiming for all to hear that "the price is perfect," referring to the current price of oil ahead of OPEC's scheduled meeting later this month. Then, in chorus-like lockstep, other similarly inclined oil ministers of various OPEC persuasions lend their voice to Saudi Arabia's lead as Libya's oil minister "...we don't expect any change in the quota." All this from members of a cartel that has managed to cut more than 4 million barrels production a day from the world's oil supply.
Indeed Mr. Ali al-Naimi and his OPEC cartel brethren should be very pleased. Since December of last year, they have been able to manipulate the price of oil by 258%, from $31/bbl last December to $80/bbl a few days ago (last at $75+/bbl). By contrast over the same time frame the price of gold has increased some 45% in value while the dollar has retreated some 15%. Correlation? Yes, but minimal at best, and certainly not the driving force behind oil's price increase as presented by endless talking heads.
OPEC, in conspiring to hold back over 4 million barrels of oil a day from the market, is thereby clearly colluding to impact oil's price. It is a willful policy seemingly tolerated by governments as they are not willing to confront this egregious exercise in market manipulation.
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