Right, they can’t ‘put crude out on the market’ but they can lower the price, a point he cleverly avoids.
WikiLeaks: Saudis often warned U.S. about oil speculators
By Kevin G. Hall
Saudi Oil Minister Ali al Naimi even told U.S. Ambassador Ford Fraker that the kingdom would have difficulty finding customers for the additional crude, according to an account laid out in a confidential State Department cable dated Sept. 28, 2008,
“Saudi Arabia can’t just put crude out on the market,” the cable quotes Naimi as saying. Instead, Naimi suggested, “speculators bore significant responsibility for the sharp increase in oil prices in the last few years,” according to the cable.
What role Wall Street investors play in the high cost of oil is a hotly debated topic in Washington. Despite weak demand, the price of a barrel of crude oil surged more than 25 percent in the past year, reaching a peak of $113 May 2 before falling back to a range of $95 to $100 a barrel.
So have the Saudis lost control of the price on the upside again as oil has spiked in the past few days?
How do speculators raise the price of oil?
the saudis have let their posted prices rise and are thus responsible for the increases.
they have the option of leaving their prices alone
@WARREN MOSLER,
Warren,
Are you saying every little wiggle in the daily (or intraday?) oil price chart is caused by the Saudis changing their price?
no,
I’m saying if the saudis don’t change their price the wiggles revert to the saudi price equiv
@WARREN MOSLER,
“Saudi Arabia can’t just put crude out on the market,” the cable quotes Naimi as saying. Instead, Naimi suggested, “speculators bore significant responsibility for the sharp increase in oil prices in the last few years,” according to the cable.
Why would Naimi blame the speculators for the Saudis raising their prices?
limited understanding of market forces?
@WARREN MOSLER,
How often do they change their prices?
Wouldn’t it be silly of them not to accept a higher market price, if the speculators (or some real constraint) drove the market price above their posted price?
they change them whenever they want to. sometimes daily.
you could say that. but they might also be afraid too high a price accelerates alternatives, and potentially the US 5th fleet
@John O’Connell,
Ah. So if not “every little” wiggle, then most of the non-trivial wiggles are caused by the Saudis, not speculators.
Why would they do that, I mean change it almost daily, rather than set one price and stick to it for weeks at a time, at least? Why move it up and down by so much, 20% or more over the course of a few weeks (never mind 200% up in 2008, and 70% down in 2009!)? Is it just to make us crazy? Or do they have a piece of the oil trading exchanges, too?
Is there data available on their posted price, like a stock chart? Maybe that would shed some light on their strategy.
they don’t want anyone to know they are price setters.
and obviously have done a very good job of that!
@Augusta,
The speculators raise the spot price of oil, because they have a limited understanding of what happens in the “real world” of physical oil movement and storage that is linked to the purchase of a new oil futures contract.
I am cross-posting a couple of comments I made at Mike Norman’s
1st comment
2nd Comment
speculators can drive up the futures price but if the saudis leave their posted prices alone, letting their buyers buy all they want at their posted prices, and have sufficient excess capacity, the spot price will gravitate around the saudi pricing.
monopolists are price setter.
@WARREN MOSLER,
So questions seem to be:
(1) Does Aramco respond to financial market activity, e.g., if they see higher demand in futures markets, will they raise their posted prices accordingly? Do the Saudis have any vested interest in quelling bullish financial speculation? If so, why, when, and at what price points?
(2) Does sufficient excess capacity exist? And on a related note, are discoveries elsewhere, combined with their ongoing domestic production, undermining their monopolist status to any degree? (Granted, that ought to be a drag on price, all else equal.)
Not sure if the first one has been explicitly addressed (anyone know?), and still plenty of debate on the second.
no telling what they might respond to next.
and seems they do have excess capacity, they should grow as libya and iraq and north dakota come on line
Still waiting for someone to show a credible mechanism by which futures speculation alone can drive real prices. And if oil is being physically hoarded for speculative purposes, surely the increase in inventories would be noticed?
Sir, are you saying that you actually believe government data?
@kris, US Gov’t … yes, pretty much.
@Ken,
Me, too.
Every speculator who has no intention of taking delivery must sell as many contracts as he has bought. Why does the buying drive prices up, and the selling not drive them down?
@John O’Connell,
Because for long-term institutional allocations, all closed contracts are rolled, and new longs are initiated as more of them get on board?
@Art Patten,
So, as the contracts are rolled, presumably as they near their expiration, why is there not a big drop in the front month and an increase in contango?
sometimes there is.
@Warren Mosler,
“sometimes there is”
So, sometimes the speculators do drive the price. And the Saudis allow it, or follow it. Sometimes.
Do the Saudis sell futures, too, or just spot? I would think there is a big opportunity for them to take advantage of the speculators, if they wanted to play that game. But, I suppose if you’re making $billions pumping oil, why bother with futures trading?
they are not subject to what we would call insider trading rules, so ministers can buy futures for their own accounts, for example, the hike price, etc.
no telling what’s actually happening
http://www.mcclatchydc.com/2008/06/17/41360/how-oil-speculators-may-be-driving.html#storylink=misearch
@dan,
Thanks. That interview asserts that financial markets were driving the real price, but doesn’t really give the “how”. He talks about how “wash sales” may be manipulating the financial markets themselves, but I don’t think that has anything to do with the price that say, a refiner actually pays to a producer for an actual, real world delivery (as opposed to the standardized “deliveries” traded in the markets, that hardly ever actually occur).
@Ken,
“the price that say, a refiner actually pays to a producer for an actual, real world delivery (as opposed to the standardized “deliveries” traded in the markets, that hardly ever actually occur).”
If you’re saying there’s no arbitrage effects between the two, the burden of (dis)proof might be on you, no?
@Art Patten, Not sure what I’m supposed to prove. For that to drive the price wouldn’t a bunch of physical oil need to be held off the market? Do speculators generally have the required storage capacity to drive the market in this way?
@Art Patten,
I do not believe there is any requirement to actually move oil or in anyway take “ownership”.
It just a bunch of people making trades on a electronic futures market.
@Ken and Dan,
“Not sure what I’m supposed to prove. For that to drive the price wouldn’t a bunch of physical oil need to be held off the market? Do speculators generally have the required storage capacity to drive the market in this way?”
Oil prices are still subject to the existence of a swing producer, which means price action for the underlying is dictated by their price-setting decisions; and those almost certainly incorporate futures market activity.
I think it’s reasonable for us to assume that institutions allocating to oil futures (which is what it would take for ‘financial speculators’ to be having a lasting price impact, imo) almost never take delivery, and tend to continuously roll all or most of their positions. That, times the degree of leverage employed, is essentially phantom demand. And as long as there’s (1) a desire for commodities allocations through futures markets and (2) a swing producer involved, that can occur indefinitely.
If gross notional demand can vary from actual physical demand indefinitely, then there doesn’t have to be hoarding involved to support the price (as long as the price setter(s) takes their cue from futures markets). The primary constraint, I believe, would be the swing producer’s desired revenue (barrels times avg price). If futures markets push expected prices to a level where lower volumes would result in less revenue than desired, then a swing producer would start to push against bullishness in the futures market, I believe. I can’t think of any other motivations, can you?
“Still waiting for someone to show a credible mechanism by which futures speculation alone can drive real prices. And if oil is being physically hoarded for speculative purposes, surely the increase in inventories would be noticed?”
Try this:
http://www.nakedcapitalism.com/2012/01/chris-cook-naked-oil.html
@hoops, Well that was long and confusing, and I’m not sure I completely understand what he’s saying. I am, however, left with the impression that the “dark inventory” he’s talking about refers to actual physical oil being hoarded off the markets. I have no doubt that you could drive up the price if you can manage to store up the physical commodity, but that’s different from pure financial markets speculation. Or maybe I’m reading it wrong? Entirely possible.
I also notice that he is very much out of paradigm with MMT, with all the talk of Fed “money printing” driving up commodity markets, but I suppose that is a separate issue.
dark inventory sounds like inventory in the ground.
doesn’t alter the fact that the saudis are directly responsible for price
@hoops,
Take a look at what happened in the silver market recently. Margin hike resulted in a downward spike of paper and physical silver. What more proof do you need. The biggest market controls the price the smaller market gets arbitrage to the bigger market. As price separates arbitragers buy the lower price and sell the higher priced the smaller market moves quicker when the same dollar amount is applied to both market. At least that’s what i observed.
@steve m, Is silver a good example? Much easier to store and hold the physical commodity than for oil, right?
and a monopolist is price setter
@WARREN MOSLER,
I’m not sure what you mean. Hoops was looking for a way in which future markets influence price of the physical. The silver market was an example of paper leading physical. I wonder what would happen if %100 margin was suddenly invoked on oil? Look at at oil in 2005-2008. You tell me did opec raise price to $150 just to drop it down to $35 6 months later ? Does supply and demand move so violently? It looks like any other asset bubble money is pumped into with quick drop as every body heads for the door What about last year did opec happen to raise their price coinciding with the Arab spring which translated to higher physical price at the pump?
The U.S. ultimately is the de-facto price setter of oil. The oil monopoly is subservient to the more absolute world military monopoly. Iraq tried to take euros instead of dollars for oil look what happened to them. Libya similarly was starting a pan-African currency.I haven’t seen a model yet from economists that include geopolitical machinations.
2008 saw the great mike masters sell off when pensions liquidated holdings, etc. exciting times!
Steve … silver is relatively compact and easy to store … all you need is a safe or a vault somewhere. So if the futures price is bid up due to speculation, I could make easy arbitrage money by buying and storing physical and selling forward. That should bring the spot price into alignment with futures ….
For oil, that isn’t so easy. Buying and storing it requires infrastructure and expensive storage facilities or tankers. So the opportunity to arbitrage is pretty limited unless you have those things, right? And if that sort of thing was going on, say in 2008, it should have been noticable to the folks who track that sort of thing … IEA for example. Or at least I would think so. I don’t know anything about the industry, so maybe there’s an angle I’m missing.
@steve m,
but, you don’t need to store oil just cut off the supply. I read an article during the rise to 150. That Goldman least all the day rate tankers and left them to float empty.
Does anyone have a chart of the Saudi’s posted prices over time? I want to see the timing of their price changes– if the market follows the Saudis or if the Saudis follow the markets.
the saudis claim to follow markets, much like mexico did a few years back with regard to its short term rate.
in both cases, as monopoly suppliers at the margin with excess capacity, the price goes to where they post it whether they
are ‘following’ anything or not.
that is, the monopolist is responsible for price.
Hey Warren….
What the hell is going on with Cullen Roche?
I think that boy done lost his mind. Whatever knowledge he has found, running up a board insulting headline MMTers and injecting poison into the MMT debates is not a way to go about it. That’s what trolls do.
And can you please explain this S=I + (S-I) thing.
All they did over at Prag Cap/MMR was confuse me.
I don’t know where to begin. I don’t like Roche’s viciousness.
Can you please speak on some of this….I’m familiar with Roche’s beef with the JG and Knapp, but what the hell are they talking about here with this equation?
Getting annoyed with MMR.
Thanks.
@Charles Hayden,
Whenever you see the equals sign in economic argument substitute some form of ‘implies’
The order in which people write supposed mathematical equivalences seems to indicate what they believe is the causal order.
which is why I delight in writing:
YP = VM
and waiting for the confused responses.
@Neil Wilson,
He he.
Sounds like Roche is abandoning MMT altogether for Scott Sumner’s monetarism. We don’t need deficits! We need stocks! etc.
Sounds to me a lot like the thinking that led to the housing crash. You know…if households deficit spend on houses (appreciable assets)….we can keep the market moving without higher deficits adding NFAs.
Somebody in the MMT camp needs to give us something along the lines of ‘What’s the deal with MMR’?
I’m getting sick of Roche’s bomb throwing.
But with the banner week, month, & year for MMT bringing it new attention and followers…folks need to keep it classy.
@Charles Hayden,
I get the impression Cullen is trying to find a way to make MMT politically acceptable to the GOP ..the no JG approach …
And his issue with’ Taxes drive money’ is also short sighted …
good luck to him ..
should work if they share the same sense of logic
stocks are a source of corporate funding, along with debt and income.
seems he gets causation reversed quite a bit.
@Charles Hayden, Whether his economics are perfectly sound or not, it is beneficial to see some counterweight. A lot of the academics who helped develop MMT come off as more socialist than is characteristic of this country. (please, go bother europe)
Now I’ll admit I usually only read headlines and skim through the rest, but you are lucky if your average voter does even that.
I do read most of the content here because it is for the most part kept apolitical.
And refreshingly, I have yet to bear a headline mentioning a ‘Gold Top’ or a ‘Ten Reasons Why Dow 30% Undervalued’…
@Charles Hayden,
“A lot of the academics who helped develop MMT come off as more socialist than is characteristic of this country. (please, go bother europe)”
Looks to me like the primary aim of ‘European socialism’ has been to keep people in their places, which is very different from traditional ‘American socialism’ or whatever you want to call it (Progressivism, New Deal, Great Society, etc).
What the American right is now pushing is an uber-European form of socialism, i.e., lower social mobility than we’ve traditionally had in the States, with an even lower and more tattered safety net than in Europe. Hardly a recipe for national success.
haven’t been to his site in quite a while, so don’t know what it’s about.
let’s just say we have a different sense of logic.
specific question welcome, thanks
@WARREN MOSLER,
Warren- Why do they (the MMR people) think this S = I + (S-I) is so important?
Thanks.
@Charles Hayden,
“Why do they (the MMR people) think this S = I + (S-I) is so important?”
Elevates the importance of private sector investment–as someone points out above, more in tune with GOP and libertarian philosophies (and the overwhelming philosophical views of people in our shared profession).
While I don’t think that drawing philosophical battle lines is very constructive (especially when there are errors of logic, causation, etc involved), it is something I’ve predicted would happen to MMT. Might be happening sooner rather than later?
or, if any agent spends less then his income, another must spend more or there is unsold inventory which leads to reduced employment and reduced income and unemployment
I don’t know what it is supposed to be ‘saying’?
@Charles Hayden,
That’s what I thought Warren.
@Charles Hayden, I don’t like Roche’s viciousness.
Cullen thinks he is on a holy mission and acts like your typical religous zealot, very mean and vindictive person in the personal communications I had with him, total opposite from warren.
@Save America,
Completely disagree with you. You keep repeating he is vicious. What’s the proof?
@Save America,
I think Cullen thinks there is too much ivory tower in MMT. Bill Mitchell and Randy Wray are unapologetically progressive. Progressive ideas don’t necessarily fly with the teeming masses. He is trying to take it to the center, although if you follow Randy’s current Modern Money Primer at NEP, he does a very good job of explaining MMT from all perspectives. Personally, I think he is trying to reinvent the wheel and is just confusing the issue rather than help.
@chewitup,
Agreed.
But Department of Innovations? Come on. That’s not going to fly with people.
How is that less government compared to the JG?
Mind you, the left doesn’t like the JG because it amounts to workfare, as opposed to a basic income guarantee.
Congress could have a very minimal role in JG. Provide oversight and instructions for combating moral hazard. State govts and District FED banks could work out certification for Job Guarantee positions in non-profits, charities, impoverished local govts, and statewide projects.
Certified employers get laborers paid by US Treasury. Operational costs put up by donations + sub-national government tax revenues.
A JG program can be completely consistent with “Federalism.”
@Charles Hayden,
“A JG program can be completely consistent with “Federalism.””
Amen. Ned Phelps is no leftie, but the GOP (save Frum maybe?) continue to sweep his labor market ideas under the rug. So do our allegedly progressive ‘New Democrats’ for that matter!
http://www.beaconhill.org/NewsLink/NLV21/v2n1bookm.html
@Save America,
I don’t mean to be a jerk Save, but sometimes you’re a real PITA when posting comments. Maybe that’s also true of your personal communications? I’ve never heard anyone else describe Cullen as “vicious,” and in his countless posts and comments, as well as some limited personal communication, he’s always been very civil.
The U.S. net exports of distillates are setting records, next the shutdown of a refinery on St. Croix no less, while demand by U.S. drivers drops like a stone, yet we see record prices for drivers this time of year.
Looks like Saudi Arabia may join Israel and Iran as bit players in this election cycle.
@Winslow R., Yet China is now the worlds largest car market (who use our military by proxy to do all the dirty work).
And Warren went down to the USVI for those 3% tax rates to save jobs and grow jobs there, so all this talk about a closed refinery makes no sense to me….
The gas prices have wiped out all the Benefits from the payroll tax holiday, joe 6 pack just can’t get ahead. If the sauds are our friends, why are they squeezing so hard on our crotch? I say make war, not love, probably time for some shock and awe in saudi land… Obama got plenty oil in strategic reserves until we can liberate that Saud oil for soccer mom’s suburban…
Now China has to hire eastern european gypsies to do the lower order grunt work cause chinese workers now want too much pay, http://www.zerohedge.com/news/europe-now-chinas-sweatshop-great-wall-starts-building-cars-bulgaria
@Save America,
So Bulgaria is populated entirely by “eastern european gypsies?” Nice. Gypsies aren’t mentioned anywhere in that article. What the h*ll is wrong with you?
Too much money and liquidity and financial repression is the culprit, speculator are just ‘moving inflation across assets classes’. If Cb’s end owning hald of the world assets speculators will end up pilling on the few assets classes which they can invest in. This is what failed CB’s like the FED or the ECB want, to create more bubbles aka ‘growth’ of credit and asset price inflation. Just buy every single public bond in the world and force investors to corporate debt and equities, and off course commodities.
But this won’t create growth, quite the contrary, it will trigger strong inflationary pressures. There are too many savings (financial assets) and yet some MMTers want to increase them! For what? More bubbles?
No, the problem is these savings are not ending in the right place: investments for productivity gains and in the pockets of the majority. We need less money in the system so less bubbles can be created and we need that money to change hands faster increasing trade and production until we reach full capacity utilization and real inflation rises. When that’s done if there are profitable projects to finance we can increase NFA, not before!
The wealthy just want more ‘savings’ so they can suck most of the inflation which ends in their pocket, with that they can buy assets and real goods and services while the population starves and gets poorer. The prescription it’s “easy”, doing it not because the elites are not interested in this happening:
– Destroy the financial apparatus sucking the life out of the global population; this will trigger a deflationary wave. Glass-Steagall back, massive controls on capital flows around the globe; banks can’t operate outside of the currency area borders; only investing funds can; no more ‘too big to fail’, if these funds go broke because bad investing decisions let it be. No more covered bailouts of shadow banking system using the banking system problems.
– Cut taxes to the max for the majority, increase massively the taxes derived from financial rents (destroy excess idle savings by the wealthy). If there is some sort of unemployment left increase public deficits even more with necessary projects that contribute to reduce external commodities dependencies (ultimately prices could be deflated if there were not external dependencies and inelastic demand and lack of substitutes, the tulip bubble got deflated very easily because it wasn’t a necessary good, not so much for oil).
– End the currency & trade wars and have balanced fair trade, no more ‘dollar asset accumulation at the expense of deficit and using household leverage as a can kicking tool’, no more race to the bottom both in exchange rates and in the this is only good for the wealthy. Floating exchange rates or no participation in trade treaties and international institutions, and use of both parties currencies in bilateral trade arrangements. This is the most difficult part to fix IMO (Keynes knew well).
P.S: No more currency areas without fiscal integration and transfers. They are a disaster: eurozone. No more currency unions without democratic check 6 balances and institutions, like the EU authoritarian regime.
you need to re read the 7dif at this website, thanks.
@WARREN MOSLER,
Why, where am I wrong?
your approach is from the wrong angle
@Leverage,
My approach is compatible with MMT, it just doesn’t ignore the politics of the situation and the structure of wealth and income distribution right now.
There is too much dollars in the world, only they are in very few hands and idle or invested in gambling on asset prices because the current incentive structure. The FED financial repression is drving inflation around, making that money move to stuff like commodities or the stock market and reflating asset prices that should be depressed.
Only increasing NFA so they will end again in the same hands is not a solution, is just supporting the status quo which as entire disaster, more can kicking.
If there is too much money in some places that allows financial speculation destroy it, and if there is a lack of money in other places (lack of demand and spare capacity) increase it. It’s very easy to grasp IMO.
Then we can solve the obvious structural problems which exist, if they did not it wouldn’t matter if oil is at 150$ or $50. If someone tried to manipulate the prices of chicken rising them people could buy other things, but with oil this can’t be done. Then there is the problem that you consume much more than you produce, and you want the world to keep giving you oil for paper, won’t work; never did, won’t now, this an exceptional situation, a disequilibrium that always self-corrects at some point, so prices rise because there is no more credit for selling oil for developed nations.
as discussed towards the end of soft currency economics, for the most part distribution of consumption is what matters
@WARREN MOSLER,
Warren, given the last decade and current affairs, and if you have a Minskyan background you should know that’s not completely true.
Consumption by itself means nothing, in an economy where an huge part of the activity is conducted around the notion of asset-price inflation and unproductive financial shenanigans (FIRE >40% of the economic rent) consumption is not the only thing that matters. Consumption on things that actually destroy capital is not good, real inflation (adjusted for housing) got to almost double-digit during the last decade while there was an stagnation of wages or even worse, and an increase in structural unemployment (disguised with bubblenomics).
Increasing NFA is not gonna change that, but feed into the beast of bubbles and ponzinomics which is not sustainable anyway (not in a world which will have more & more difficulty to grow, with real limits, specially in developed nations).
never have read minsky. randy had scheduled me to meet with him but unfortunately he died before the meeting.
and increasing nfa by, for example, offering a job to anyone willing and able to work will, by definition, result in at least a form of ‘full employment’
and a fica suspension that increases sales (and lowers costs and probably prices) can increase sales to the point of something near full employment as it’s done in the past.
and yes, digging holes and filling them in is less than worthless, though it can be called full employment.
In the video below about gas prices, Obama says to build nukular instead of letting the repubs drill the gulf into oblivion, Warren, why don’t you guys build a Nukular facility at the USVI in place of the oil refinery? Obama may even give you lotsa funding like solyndra.
If Nukular is the solution to our ballz being squeezed by saud princes, (since asking soccer mom to park her suburban and ride a bicycle instead will never work) I can think of no one better than you to lead the charge in your own backyard. You could give so many jobs to all those newly unemployed islanders.
http://www.youtube.com/watch?v=tEEdMX0E4Cs&feature=g-logo&context=G2718b9eFOAAAAAAAYAA
8
@Save America, A new nuclear energy plant has just been approved for Georgia. The problem, in addition to waste disposal and treatment, with nuclear plants has always been that they take more energy to build than they are expected to produce during their expected life. Possibly, that equation has been adjusted by running nuclear plants beyond their initial expiration date AND not being overly picky about normal maintenance and repairs. Which is why Al Jazeera is running a program about pipes being so rusty that they fall apart when scraped for repainting. IMHO, the other main problem with nuclear plants has been the water the furnaces have to rely on for cooling because we still haven’t managed to fabricate a furnace that can stand the high temperatures produced by a reaction. The nuclear part, as the engineers always say, is not the problem.
Anyway, when our plants were being built in the ’70s, it was projected that energy consumption would increase 7% per annum, ad infinitum. That was a ridiculous projection, but that’s what the financing was based on. And that’s what accounted for Seabrook Station going bankrupt several times until now it is owned by Florida Power and Light.
In the event, the real growth of electric energy consumption has been 2.5% per year and in 2011 it was negative, for the first time ever. Moving our industries to China and conservation have had an effect that nobody wants to talk about and has given rise to the hope that all-electric cars will take up the slack. Building nuclear plants will take up some slack, as well.
It’s my understanding that Russia is stationing its submarines off-shore above the Arctic Circle to generate electricity for the cities in the frozen north. Smaller is probably better when it comes to nuclear plants, as in so many other venues.
Incompetent people seem to have no option but to manipulate other people, while competent people transform their environment. It’s perhaps telling that Ricky Santorum referred to the “vagaries of the environment,” which ought not to deter man from exercising his dominion, as part of his critique of President Obama’s environmental concerns. Perhaps he imagines that if he just ignores the environment, it won’t bite him.
@Monica Smith, Yikes. There are lots of blogs on Nuclear Power and the economics of nuclear. Go get an education, if you are able.
[[ I guess we will see if the price setter can control prices by selling at spot. I will eat something inedible if Saudi can sustain 9 mbpd exports for more than a month or two. ]]
http://www.reuters.com/article/2012/02/24/us-saudi-oil-idUSTRE81N1EY20120224
Other sources at oil companies who buy Saudi crude said that Riyadh was offering extra oil both in addition to existing long-term contracts and on a one-off “spot” basis.
One said Riyadh appeared to be seeking to “control the price” by offering more oil.
“They have been accommodating to allow people to take extra oil,” said one source at a leading customer of Saudi Arabia, who declined to be identified. “It is basically an addition to your term contracts.”
Another said spot sales were being made available, a rare move by state oil company Saudi Aramco which prefers to market its crude via long-term contracts.
-=-
[[ Mr. Hoffmeister has some interesting things to say ]]
http://video.cnbc.com/gallery/?video=3000073805
Mr. Hofmeister, former CEO of Shell Oil Company, was interviewed on CNBC this morning. Some excerpts from the transcript: “Hofmeister: (Oil) Demand globally is not down. That’s the issue. Demand continues to rise in Asia and whether we (the US) use less or not, doesn’t matter. Price is going up because supply can’t keep up with the demand . . .
I think OPEC is about maxed out. When people talk about spare capacity in OPEC, I don’t see it. I just don’t see it coming through and I’m not sure it’s there. And it’s not just that they’re greedy, but they’re really producing what they can produce.”
http://www.businessinsider.com/surging-gas-prices-are-threatening-one-of-the-best-years-american-farmers-have-ever-had-2012-2
Some Farmers say these new gas prices are going to put them out of business, don’t they have nukular and solar powered combines yet? Maybe a few more billion people can starve to death before the masters of the universe get all this worked out… I guess the 5th fleet and a few others gonna have to go bring some shock and awe so that its brown kids bellies that go empty, not us in the west….
But I know Warren is ahead of the game on this energy Issue and is talking to those islanders and island farmers about a nukular power plant and pebble bed reactors with some solar farms down in the USVI to meet all thier current and future energy needs.
@Save America,
And you wonder how anyone could be a “very mean and vindictive person in…personal communications” with you…good grief.