Oil hits new record $117 a barrel - expect it to hit $150 by 2010

[Hemidakota]

I totally agree but at this point, the spirit will begin to withdraw itself from the areas of those who reside in that conidtions...CHICAGO - WASHINGTON. More or less, bring back that humble abiding people.

[Hemidakota]

Originally Posted by Mullenite

Blood for Oil?




Blood for Oil?


Fig2: Inflation and Crude Oil Prices

Do you remember gas lines and consumer panics in 1991? Of course not, because we did not experience gas shortages in 1991. The U.S. was not cut off from Middle Eastern oil in 1991, nor were we cut off from Middle Eastern oil in 1973. In the six months prior to the embargo, OPEC’s total production averaged 31.4 million barrels per day (MMBD). During the three month embargo, OPEC’s production averaged 29.6 MMBD.[32] So the size of the production cut in 1973, was about the same size as two different disruptions the world recently faced in December 2002 with political unrest in Venezuela and again in April 2003 with the war in Iraq and worker unrest in Nigeria—but I am sure we will not remember these recent disruptions in the same vivid way we remember the oil embargo.[33] If the world’s oil prices oil did not rise that far, and production was not cut that severely, why was our experience in 1973 during the Arab oil embargo so bad?

One key reason the 1973 embargo had such an impact on our collective American psyche is because the Nixon administration attempted to mitigate the impact of rising oil prices by imposing price controls rather than letting the free market operate.[34] Price controls, not the actual oil embargo, were the biggest culprit behind the widespread gasoline shortages at the time. According to Jerry Taylor, natural resources studies director at the Cato Institute,[35]

“Price controls imposed in August 1971 by the Nixon administration prevented major oil companies from passing on the full cost of imported crude to consumers at the pump. ‘Big Oil’ did the only sensible thing, it cut back on imports and stopped selling oil to independent service stations in order to keep its own franchises supplied. By the summer of 1973, gasoline prices were exploding, pumps were running dry, and long lines were commonplace. And that was before the Arab oil embargo or production cutbacks were announced.”



Afterwards, even the Saudi oil minister Sheik Yamani admitted, “[the embargo] did not imply that we could reduce imports to the United States . . . the world is really just one market. So the embargo was more symbolic than anything else.”[36] Indeed, the 1973 oil crisis was caused as much by the bad economic policies of the Nixon administration as by production cuts in OPEC.

This is also why economic embargoes have a dismal record of success in changing the behavior of other nations.[37] Unless all countries are willing to support the embargo, the target nation’s leadership can merely obtain whatever products they want through the countries that choose not to participate. The only way the U.S. could truly be cut off from oil in the future is if every major oil exporter chose to forbid sales to the U.S., and to forbid sales to the nations we trade with – a highly unlikely event.

We talk about this a few years ago about an inventor who accomplished this....so much talent in this world.