22 May 2008
Self-fulfilling Prophecy
Posted by Joy Bischoff under: World Economy .
The last paragraph underscores the problem. The falling dollar and rocky stock market is going to spur investors into driving oil higher which will effect absolutely every aspect of our economy. This has become a self-fulfilling prophecy; fear of sky rocketing oil brings the investors who create sky rocketing fuel. What a mess!
Oil Rises Above $135 After Unexpected Drop in U.S. Inventories
By Christian Schmollinger
May 22 (Bloomberg) — Crude oil rose to a record above $135 a barrel in New York on concern that supplies are inadequate after U.S. stockpiles unexpectedly dropped last week.
U.S. crude inventories fell 5.32 million barrels to 320.4 million barrels last week, the biggest drop in four months, the Energy Department said yesterday. Gasoline supplies plunged by 755,000 barrels when analysts expected an increase.
“Everyone’s jumped on the bandwagon,” said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “There’s agreement that $200 is possible and that’s getting more people into the market. We have very little supply cushion going forward and that’s playing into the minds of investors.”
2 Comments so far...
Cameron Says:
22 May 2008 at 9:26 am.
Skyrocketing Oil Prices Stump Experts
Oil Execs Tell Congress: Don’t Blame Us
Executives from the country’s top oil companies say they are not to blame for rising prices at the pump and offer an array of reasons why gas costs more and offer some ideas on how to solve the problem.
By Steven Mufson
Washington Post Staff Writer
Thursday, May 22, 2008; Page D01
Confused about oil prices? So are the experts.
Executives from the giant oil companies say it’s partly the fault of “speculators” or financial players. Key financial players say it’s really a question of limited supply and expanding global demand. Some members of Congress accuse the Organization of the Petroleum Exporting Countries for bottling up some of its production capacity. And OPEC blames speculators, wasteful U.S. consumers and feckless U.S. policy.
Almost everyone points at China’s growing appetite for fuel.
Whatever the causes, one of the most dizzying runs in the history of oil prices picked up pace yesterday — again — as crude oil prices jumped to settle at more than $133 a barrel, up $4.19 in one day, 18 percent so far this month and more than one-third so far this year. Prices climbed even higher in late electronic trading.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/21/AR2008052100386.html?wpisrc=newsletter
Jan W. Says:
22 May 2008 at 9:51 am.
It doesn’t seem right that people are betting on oil to do well so that means we have to pay more for gas. Kind of twisted. The system needs to be changed.
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