It is almost an article of faith among "Peak Oilers" that as economic pressure increases, the price of energy in general and oil in particular will be subject to wide fluctuations and rapid volatility. However, this article by Thomas Palley from TomPaine.com raises the question of whether -- and how much -- the oil market is gamed by The Powers That Be.
It may seem counterintuitive to think that the price of oil could be artificially high, but a peak oil scenario without human interaction -- a simplified mathematical model -- would be a smooth, featureless curve. But the market is chaotic. The discontinuous swings from $20/bbl to $80/bbl to $50/bbl come from unpredictable market forces -- or do they?
If strategic manipulation of the strategic reserve causes such swings in price, we may be in for a rough, rough ride over the next two years. Bush wants to double the capacity of the SOR. If he can manipulate a drastic increase in oil prices and blame it on Iran (over some pretext, like a terrorist action or military maneuvers) he will have his
casus belli.
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It turns out there is good reason to believe that record oil prices may be due to our own strategic oil reserve, which the Bush administration may have been manipulating to drive up prices for the benefit of its clients. This is something Congress must investigate, and here is some preliminary evidence.
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The oil market is full of smoke that provides perfect cover for corruption. Every price blip calls forth explanations in terms of Chinese demand, more violence in Nigeria’s delta region, cold weather, threats from Venezuela’s Hugo Chavez or heightened tensions over Iran’s nuclear program. The strategic reserve is the perfect vehicle for corruption since transactions can be cloaked in the veil of national defense. But the situation is clear. A motive exists, the bad character of the administration is known and the circumstantial evidence is strong.
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One last factoid. A recent IMF study documented that oil prices in the U.S. appear to be politically manipulated, falling prior to elections—as they did in 2002, 2004 and 2006. If you are an economist you ask how that is done. The answer is the strategic oil reserve.
Read the whole sordid story at
TomPaine.comThis was also posted for comment in
Editorials by
Bleachers7. I repost it here with my own emphasis, the connection to both Peak Oil and war scenarios.
--p!