U.S. at the Mercy of Saudi Arabia and Other Oil Producing Nations
June 23rd, 2008 by Damon CliffordJust last week, I mentioned that speculators were causing an increase in the oil prices. Yesterday, Saudi Arabia said they would increase production of oil by 200,000 barrels of oil per day. But even with that increase, many don’t believe that it will effect gas prices. The Saudi’s told us that speculators and the falling U.S. dollar are causing high oil prices.
They’re going to have hearings this week on this issue:
The question of whether speculators are influencing prices is expected to get closer scrutiny this week in Washington, where a Senate committee led by Senator Joseph I. Lieberman, the Connecticut independent and former Democrat who supports Mr. McCain, will hold hearings on the price swings in the crude oil market.
It will be interesting to see who’s required to come to these hearings. But others don’t think speculators are to blame, just simple economics of supply and demand:
But Mr. Brown pointed to fundamental economics and “oil demand rising faster than supply.” The American energy secretary, Samuel W. Bodman, put it more bluntly in a meeting with reporters, saying, “There is no evidence we can find that speculators are driving futures prices.”
I believe it’s a combination of both higher demand and speculators. The higher demand is exactly the reason why the speculators are pushing the price up. They want to make money, and are taking full advantage of our dependency on oil! I am not against capitalism or taking advantage of an opportunity, that is why we need a solution that will force the speculators exit their positions.
So, until we start drilling more at home, the U.S. will continue to be at the mercy of foreign nations. If we can solve the oil crisis and bring prices down, I believe the economy and the U.S. dollar will begin to recover as well.
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