Posted: March 9, 2011 in thomas t fields jr., Uncategorized, WORLD EVENTS
Tags: , ,

That answer is simple, crude oil prices.  What the real question should be is why are the crude prices are so high.  In a word “speculation”.  Egypt had a complete regime change and it was so amazingly peaceful that when it was over the world quickly moved to normality.  Yes there were casualities but for an entire heavily rooted leadership to be overthrown so quickly, the body count was quit minor.  But from a crude oil standpoint, little or no physical affect was felt.  Yet the oil started to rise.  Then Bahrain had its’ short set of demonstrations and again the price of oil rose.  To top this off, Bahrain is no true oil producer in the manner as neighboring Saudi Arabia.  Again speculation of what would happen to the region if Bahrain fell and thus affect the supply of oil.  Then came Libya and what appears to be the makings of a civil war.  This does provide the possibility of an oil interferer; however, as bad as it looks, at this point in time only a pipeline and a couple of crude tanks have been damaged and for those that have ever worked in the oil patch, this is not a major set back.  None of the US refineries are down like what we experienced in Katrina, but still the crude prices rise thus sending the cost at pump to record highs.  So what is the cause of the oil price spike.  Speculation is the word and the commodity traders that are betting on a disruption in the supply of crude are artificially raising the price.     Eventually supply and demand will come into play and the marginal cost of a barell of crude will come down.  And when the drop in crude does take place one thing is certain, the cost of gas will come down much slower with the decrease in oil prices than the gas price increase we have just experienced with the oil price jump.


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