PHP Warning: Use of undefined constant VBA_SCRIPT - assumed 'VBA_SCRIPT' (this will throw an Error in a future version of PHP) in ..../includes/functions_navigation.php(802) : eval()'d code on line 1 Interesting Comment from Head of OPEC - Page 2
I doubt that diesel will ever again be cheaper than petrol because diesel is the fuel of choice in much of Asia. Unfortunately, we buy on that market and demand for diesel just keeps on increasing.
Hoping to buy petrol and diesel and petrol at under $1 per litre in the near future seems like wishful thinking. I hope cheaper prices are achievable but that might imply demand destruction which will bring about other undesirable consequences in our economy.
The whole scene is complex and confusing. I wish that it would all go away and we could get back to fishing without being troubled by the cost of mortgages, fuel and other essentials.
But really, it's a mess, with the words and actions of bankers, financial whizzes and politicians giving the sense that they are trying to put lipstick on a pig.
I'll throw some fuel on this fire - pardon the pun!
About 3 or 4 weeks ago I received a document prepared by Suncorp's treasury team - they provide big organisations with briefings on key movements in the market covering all sorts of things - shares, commodity, agricultural futures, etc and they do extensive analysis of this stuff all of the time. It's their core business, how they make their money.
Well this briefing paper was their analysis of the price of crude oil per barrel, and the bottom line was very consistent with the experts views and OPEC views quoted earlier in this thread - in fact they predicted oil to be back below $100 US by the end of this year and to eventually drop back to as low as $70 a barrel by end of 2009, and to stabilise there for some time.
Whilst they acknowledged that a lot of "courage" is required to predict any of this with any certainty, the message was clear - the reason for the recent spike is all about rampant speculation in the markets and fear, not about supply and demand, which is easily being met by the oil producers. It presented quite an analytical and unemotional assessment in plain language and simply concluded that there was no good reason or rationale for the oil price to be where it is now and that the market would soon start to correct itself.
This was about 3 weeks or so as I mentioned earlier.
I'm not saying they will be right (but like all of us I hope they are!) but shortly after their article the price of oil did start to drop and its continued to drop since then, so maybe they might just be on the money. The Sheiks seem to agree. It will be interesting to see what happens.
This is just a few paragraphs out of an article in USA Today.
"Speculation is not illegal, but that does not mean it isn't hurtful," said Sen. Joe Lieberman, I-Conn., at a Senate hearing last Tuesday addressing the role of speculation on energy prices. He plans to roll out an anti-speculation bill after July 4.
"Speculators," added Lieberman, "are moving enormous amounts of money into commodity markets for the obvious purpose of making more money. But in doing so, they are artificially inflating the price of fuel futures and causing real financial suffering for millions of people."
Some lawmakers contend that oil prices would tumble sharply, perhaps to $60 a barrel, if speculators were banned from commodities markets. They suspect — but have yet to prove — that illegal market manipulation is inflating a commodities "bubble." The CFTC acknowledges that it started a nationwide probe in December to investigate possible illegal activity in the oil futures market.
But without full knowledge of who all the players are and how big their positions are in the oil futures market, both regulators and politicians admit it's tough to prove their suspicions. "At this point, we simply don't know what role speculation or manipulation is playing in price increases," Sen. Dick Durbin, D-Ill., chairman of the Appropriations Subcommittee on Financial Services and General Government, said in a recent statement.
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