CRUDE OIL PRICES. 1970-2007

DO THE TERRORISTS HATE US LESS NOW THAT WE ARE PAYING $144 FOR A BARREL OF OIL?

OSAMA BIN LADEN. TERRORIST, OIL ANALYST, PROPHET OF PROFIT?

AUTHOR’S NOTE: SMARM ALERT. BUT THIS TOPIC DESERVES SMARMINESS.

In 1998, Bin Laden stated that his target price for a barrel of oil was $144. As of July 3rd, Light Sweet Crude was trading for $145.29. Brent Crude was trading at $144.42. So we have hit, and even surpassed, Osama’s ignominious target.

Bin Laden’s ability to ramp up the price of oil from $11 dollars per barrel in 1998 to today’s price is subject to serious suspicion. It would have seemed that oil prices would have spiked after the 9/11 attacks. However, oil remained steady at around $25 per barrel (in 2006 dollars) in 2001 and 2002. This was a period of recession and economic recovery for the US and Western Europe.

MISSION ACCOMPLISHED?

The relentless rise in oil prices began about the time of the American invasion and occupation of Iraq. The invasion caused a massive disruption of Iraqi oil production. And that event coincided with the generally unabated increase in oil prices.

But the Bush/Cheney debacle was only partly responsible for the oil price leap. Growing demand from China and Asia ramped up prices.

SO WHAT DOES ANY OF THIS HAVE TO DO WITH THE PRICE OF TEA IN CHINA?

To the Author’s mild surprise, quite a bit.

The Author began this post expecting to find the nearly vertical movement in oil prices to have begun after 9/11. To his surprise, it did not. The hockey stick blade began in mid-2002. The rise has continued, generally unabated.

We can take some small comfort in the fact that it takes market forces to move the price of oil. The 9/11 attacks, horrendous as they were, had no meaningful oil price impact.

The same forces of supply and demand operate now to price the lifeblood of the American economy. We should pay more attention to life and blood as we move into the last days of the hydro-carbon economy. And remember that the lives and blood of Americans and Iraqis ultimately had little effect on the price of a barrel of Texas Tea.

THE DESERT OF THE REAL IS SOLAR POWERED!