Thursday, April 27, 2006

Why the oil price hikes?

I got this link from OpEd news of Rob Kall. It provides a 4-page deconstruction by a Joel Peskoff of the reasons given for the recent oil price hikes.

The usual reasons: Iran risk factor, decreased oil production from Iraq, China as a competitive oil consumer, increased global demand, etc. are not in congruence with the data. Petroleum consumption is just up over 1% from last year and oil stocks are at high levels, i.e. there is no shortage. Speculation though by oil futures traders is rampant. Interesting article, since it links the oil industry to financial capitalism.

"In God We Trust, all others bring data" - W. Edwards Deming

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