This is for all those nitwits who cried that “George Bush and his oil buddies were behind the rising price of oil,” over the past few years!
Dopey people believe dopey things.
You only have to look to the “9-11 Truthers” for proof of that.
Oil spiked to a record high (close to $150/barrel) earlier this year on China’s stockpiling oil ahead of the Bejing Olympic Games. That DEMAND, along with that generated by the rapid industrialization of developing nations, most notably, India and China, had driven the global price of oil, which is ALWAYS predicated on SUPPLY and DEMAND, inexorably upwards over the past decade.
Yesterday, according to Bloomber News, “Crude oil fell in New York on speculation that declining fuel demand because of the global economic recession will outweigh cutbacks in output by OPEC.
“Crude pared yesterday’s 10 percent gain, which came after Saudi Arabian Oil Minister Ali Al-Naimi said the kingdom had delivered the reductions promised to the producer group. Initial jobless claims in the U.S., the world’s biggest energy consumer, surged more than forecast last week to a 26-year high.
“If you look at the overall big picture, the demand collapse is still the overriding issue,” said Tony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “What producers can do is break the momentum of the fall but getting this thing back up is going to be tough.”
In fact, global oil demand is expected to decline slightly in 2008 and 2009, for the first drop in a generation, as the most severe economic crisis since the late 1970s pinches consumption across the developed world.
According to a Reuters poll of 11 industry analysts, banks and industry groups, worldwide demand will decline by 20,000 barrels per day (bpd) in both 2008 and 2009 to 86.03 and 86.01 million bpd respectively.
Even that slight fall is a huge shift from an August Reuters poll of experts, which forecast that demand would increase by nearly 1 million bpd next year.
The global demand for crude oil has not declined since the early 1980s, following the 1979 oil crisis and a severe recession in the United States.
SUPPLY and DEMAND...that’s what increases the price of oil and it’s what decreases it as well.
Governments and politicians have virtually NO/ZERO impact on commodities prices. Sure, governmental policies (like the U.S. refusing to drill for much of its estimated 1.6 TRILLION barrels of domestic crude oil) can impact supply and demand, but outside of impacting supply and demand, there is no way for politicians or speculators to increase or decrease the price of ANY given commodity.
Dopey people believe dopey things.
You only have to look to the “9-11 Truthers” for proof of that.
Oil spiked to a record high (close to $150/barrel) earlier this year on China’s stockpiling oil ahead of the Bejing Olympic Games. That DEMAND, along with that generated by the rapid industrialization of developing nations, most notably, India and China, had driven the global price of oil, which is ALWAYS predicated on SUPPLY and DEMAND, inexorably upwards over the past decade.
Yesterday, according to Bloomber News, “Crude oil fell in New York on speculation that declining fuel demand because of the global economic recession will outweigh cutbacks in output by OPEC.
“Crude pared yesterday’s 10 percent gain, which came after Saudi Arabian Oil Minister Ali Al-Naimi said the kingdom had delivered the reductions promised to the producer group. Initial jobless claims in the U.S., the world’s biggest energy consumer, surged more than forecast last week to a 26-year high.
“If you look at the overall big picture, the demand collapse is still the overriding issue,” said Tony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “What producers can do is break the momentum of the fall but getting this thing back up is going to be tough.”
In fact, global oil demand is expected to decline slightly in 2008 and 2009, for the first drop in a generation, as the most severe economic crisis since the late 1970s pinches consumption across the developed world.
According to a Reuters poll of 11 industry analysts, banks and industry groups, worldwide demand will decline by 20,000 barrels per day (bpd) in both 2008 and 2009 to 86.03 and 86.01 million bpd respectively.
Even that slight fall is a huge shift from an August Reuters poll of experts, which forecast that demand would increase by nearly 1 million bpd next year.
The global demand for crude oil has not declined since the early 1980s, following the 1979 oil crisis and a severe recession in the United States.
SUPPLY and DEMAND...that’s what increases the price of oil and it’s what decreases it as well.
Governments and politicians have virtually NO/ZERO impact on commodities prices. Sure, governmental policies (like the U.S. refusing to drill for much of its estimated 1.6 TRILLION barrels of domestic crude oil) can impact supply and demand, but outside of impacting supply and demand, there is no way for politicians or speculators to increase or decrease the price of ANY given commodity.
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Falling oil prices have drastically reduced inflation, especially here in the U.S. and that's GOOD for Americans. Of course, not everyone's happy about that. The same Luddites who've fought against America drilling for more of its own HUGE domestic supply, are now appalled at falling oil and gas prices and are busy lobbying for higher gasoline taxes...deliberately to harm the same Americans they so often claim to care about.
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Again, dopey people tend to believe in and support dopey things.
The new cult running the country now has the rally cry "But, the principles of capitalism don't work!" They will give us the principles of Obamaism. Over 1 trillion dollars of borrowed money will back up hims claim.
ReplyDeleteGood post!
ReplyDeleteIt's methaphorically like putting a bone in to a dogs mouth. Will he shew it or spit it out?
What never stops to amaze me is some peoples being amazed over market functions.
Supply and demand, supply and demand...
If the dog's not hungry; it will spit the bone out.
Keep it up!
"But, the principles of capitalism don't work!" (UJ)
ReplyDeleteThe funny thing UJ is that we haven't had true Capitalism in the United States since about 1912!
Since that time, we've had the regulated market.
TODAY, the regulated market (often called Corporatism) is the economy of the industrialized world. Every Western European country has it, we have, it, as do Canada, Australia and Japan.
Ironically enough, the most Capitalistic nation around today is Hong Kong!
BOTH Right and Left misrepresent the American economy, the Left often wrongly calling it a "free market" while the Right often misrepresents more regulation and higher taxes as "socialism" or at least "socialistic," which it isn't.
The Corporatist economy exists on a wide continuum, with Hong Kong's minimal regulation and low tax economy being toward the market-end, and France's and Germany's heavilly regulated, and highly taxed economy being toward the more Keynesian-end of that same spectrum.
America is certainly heading toward the Keynesian end of the spectrum and the irony is that it's Keynesian policies, over the past few years that have created the current crisis.
"What never stops to amaze me is some peoples being amazed over market functions." (Pela)
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It is certainly amazing how so many people find the workings of the market so mystical and enigmatic, Pela.
Here in the U.S. even some market-oriented tradionalists, like Bill O'Reilly (of FoxNews) seems to fail to see how the markets work.
He's long blamed the multinational Energy conglomerates, like Exxon-Mobil, Shell, BP-Amocco and Conoco-Phillips, for price gauging.
In one interview, with a writer whio chronicled how the commodities markets work, O'Reilly insisted that there were people who actually "set the world price of oil."
Oil, like EVERY commodity is priced according to the various commodities markets based exclusively on SUPPLY and DEMAND and events that effect or impact supply and demand, like weather, civil unrest, etc.
One of the reasons that the market isn't fully respected is that too many people fail to understand how it works....and that IS amazing, when you think about it.
Dopey people believe dopey things...love it JMK!..the libs have no ability to reason..its frightening truly.
ReplyDelete"Dopey people believe dopey things...love it JMK!..the libs have no ability to reason..its frightening truly." (Angel)
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The extent of their reasoning is their misanthropy.
Many on the far-Left revile their fellow humans, so they despise the "greatest force for good in the world over the last Century" (the USA), as they hate "Capitalism" (even our current highly regulated market) because it delivers the most prosperity to the most people.
Most on the far-Left are emotionally disturbed people who despise their fellow man, especially those who do well and do good.
You are so correct in your ideas here. Too bad that the government can't see it.
ReplyDelete-Robert-
Hi Robert, that's a great companion site to DI.
ReplyDeleteAs to the oil situation, I believe those in government DO know, they're just biased to promote things that expand government and limit individual liberties.
That's why, despite over 600 scientists opposing the UN mandate on anthropomorphic global warming, governments LOVE that "junk science," because it can be used as an excuse to institute poorly planned and vilely misanthropic public policies.
The U.S. is sitting on over 2 TRILLION barrels of oil in the Bakken Ridge, off its coasts and in the ANWAR region and there is little hope, going forward, of ANY energy system being devised that does not have emmissions problems and other such side-effects.
I don't care why gas prices are going down; I'm just LOVING IT!!!!
ReplyDeleteIt's good to know the reason, Seane-Anna.
ReplyDeleteRight now, there are many in government who want to riase gasoline taxes and make drilling for more of our huge reserves of oil and gas harder....making energy much more expensive.
You beat me to this story JMK,lol
ReplyDeleteThere is one more point that needs to be made. Since the decline of oil prices is due to the lack of demand because of the slumping economy. This validates the fact the the economy was strong under Bush not us in America but around the world until recently. When economies grow, they naturally have to consume more fuel to sustain their growth. When the supply of oil doesn't increase to match the high demand, prices naturally have to go higher. I knew back in July that the the price at $148 a barrel could not be sustained. Stupid liberals kept blaming "Exxon Mobil and Bush". Instead of those minds of mush learning revisionist American History and how to be Marxist in three easy steps, they should open a book on Econ 101 intead.
"Since the decline of oil prices is due to the lack of demand because of the slumping economy. This validates the fact the the economy was strong under Bush...until recently." (Tyrone)
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I agree with you, until late 2007, we had low core inflation, low interest rates and low unemployment, much of that due to the combined tax cuts in Bush's FIRST term - the lowered Cap Gains rarte and the across the board income tax rate cut.
BUT, since then, Bush has been as Keynesian as his Dad was and Bush Sr., was only the second post-WW II American President to preside over four stright years of double digit Misery Indexes - Jimmy Carter was the other, although Carter's four year average of 16.2 dwarfed Bush Sr.'s measley (by comparison) 10.2!
Bush Jr. has cooperated as well with the Keynesian Pelosi-Reid Congress as Bill Clinton had with the Supply Side Gingrich Congress.
Sadly for Bush Jr.'s it was GOLD cooperating with Gingrich's revitalizing economic policies - slashing the Cap Gains rate, massive welfare reform, etc.
Bush Jr's cooperating with the Keynesian Pelosi-Reid Congress has been a disaster! 2008 is the first year since 1993 (Bush Sr's last year, that we're going to have a double digit Misery Index.
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"When the supply of oil doesn't increase to match the high demand, prices naturally have to go higher. I knew back in July that the the price at $148 a barrel could not be sustained." (Tyrone)
What's actually driven up the demand previos to this July was the Bejing Olympics - CHina stockpiled and horded gasoline reserves.
When those Olympics started, their reserves were so great, that their lack of demad (they have so much on reserve, they haven't had to buy much on the open market...and the subsequent global recession has cut what demad would've resumed).
BUT previous to 2007, the biggest factor in the rising price of oil was the rapid industrialization of ONE THIRD of the earth's population in India and China!
Oil went from $10/barrell back in 1999 (due to new technologies that allowed us to access more oil, more cheaply) to $70/barrell over the next few years, based primarily on increasing global demand.
Watching demand and supply variations ALWAYS gives an accurate precursor to what the price of that commodity will do - things that decrease supply and/or increase demand, increase price and things that increase the supply and/or decrease demand, decrease the price.
Sadly, Tyrone, there are a fair number of "Moderate"/Rockefeller Republicans who are Keynesians as well as Liberal Democrats.
The problem Conservatism has faced is that it's been effectively held in check by Moderate (Liberal) Republicans and has never had much of a foothold in the MSM.
Those things NEED to change.