Price of Oil - As predicted by Bin Laden

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  1. #1

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    Price of Oil - As predicted by Bin Laden

    Interesting if you read this article from NY Times, 2001.

    Fears, Again, of Oil Supplies at Risk - New York Times

    THEY are the nightmares, the worst confluence of misguided decisions and startling violence, that politicians and oil executives ponder briefly and then shoo away:

    That sympathizers of Osama bin Laden sink three oil tankers in the Strait of Hormuz and choke off the narrow, bow-shaped channel that funnels 14 million barrels a day from the Persian Gulf to the rest of the world. That the United States attacks Iraq, and Israel launches a huge strike against the Palestinians, driving them from their camps and staking out more land -- all of which spurs the Persian Gulf states to cut off oil for the West. Or perhaps that a popular uprising, led by sympathizers of Mr. bin Laden, topples the ruling Saud family in Saudi Arabia, by far the world's largest oil producer.

    ''If bin Laden takes over and becomes king of Saudi Arabia, he'd turn off the tap,'' said Roger Diwan, a managing director of the Petroleum Finance Company, a consulting firm in Washington. ''He said at one point that he wants oil to be $144 a barrel'' -- about six times what it sells for now.

  2. #2

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    ayah. So when it reaches 200, we'll see an US sponsored Coup d'Etat that puts bin Laden in charge, in order to bring down the oil price to 144

    Love them conspiracy theories


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    Well bin Laden/his supporters didn't blow up tankers or take over Saudi Arabia. But America DID invade Iraq, ergo the reason oil is so expensive (and oil companies are making massive profits) is because ...


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    Well the weak US$ has a lot to do with the price of oil. Why does this never get mentioned? In 2001 the US$ index was at 120. Today it is around 72. That is a 40% drop! Silly Bernanke and his interest rate cuts... in the long-term they will do more bad then good...


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    A major part of the high nominal US dollar price of oil has been the depreciation of the US dollar against most other world currencies brought about by the US sub-prime crisis and the liquidity crunch. About 30% of the increase in the price of oil is attributable to that according to a recent IMF study. Does this mean that most US banks like Citibank and Bank of America, Standard and Poors and the other credit rating agencies, the entire securitization industry, and American home owners who borrowed too much (or just spent too much at Wal-Mart) are all in on Osama bin Laden’s conspiracy to destroy the western world? But wait, isn’t the entire global financial system run by the Jews. They must have been in on it with bin Laden. It’s official: Osama bin Laden and the Jews are conspiring to destroy the western world. I think Bank of America and Wal-Mart are in on it too!


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    Nah, I think this is way too easy. Without engaging in any moral debate on US invasion of Iraq, I'd say it's effect on the oil price is negligible. If you look at the production levels now and before the invasion, it is not as if much has changed. Iraq has huge reserves, but its production output wasn't that high.

    Imho we simply have a billion or so new consumers in the last 10 years. Individual transport is among the very first things people whose income exceeds the need for food buy. It might be only a run down scooter or a 20 y old car, but it still runs on fuel.

    Friends of mine travelled through China in the mid-nineties. What were bicycles on their photos are now scooters, what were scooters are now cars. Same in India, Vietnam.... The role of the US might be a bit exaggerated... not at last by the US itself


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    er2 : I agree. Not to mention the fuel consumed by aircraft and ships .. global commerce has its price too. But you're right, personal fuel consumption is way high.


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    The dollar has NOT depreciated. It's because other world currencies are stronger against the dollar, hence it's everyone else's fault. And how dare anyone say the dollar is weak, particularly as the US will celebrate its independence day tomorrow. The dollar is fine, all other countries are to blame.

    Back to reality, as more countries do deals "off market" for oil in other currencies, is it time for the petrodollar to move aside?

    Last edited by Claire ex-ax; 03-07-2008 at 02:38 PM.

  9. #9

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    Quote Originally Posted by er2:
    Nah, I think this is way too easy. Without engaging in any moral debate on US invasion of Iraq, I'd say it's effect on the oil price is negligible. If you look at the production levels now and before the invasion, it is not as if much has changed. Iraq has huge reserves, but its production output wasn't that high.

    Imho we simply have a billion or so new consumers in the last 10 years. Individual transport is among the very first things people whose income exceeds the need for food buy. It might be only a run down scooter or a 20 y old car, but it still runs on fuel.

    Friends of mine travelled through China in the mid-nineties. What were bicycles on their photos are now scooters, what were scooters are now cars. Same in India, Vietnam.... The role of the US might be a bit exaggerated... not at last by the US itself
    You are correct. As were the posters who noted the depreciation in the USD. These two are the main fundamental drivers of rising oil prices, although alone these would not be driving the price to quite such high levels. The short term factors such as scares and speculation are probably the reason why the price is quite so high right now, so we should expect it to come off the very high prices at some point but not back to the very low levels it was a few years ago.

    However, it's not all so bad. The high price is driving huge amounts of research into alternative fuels (which is not, actually, the main reason for high food prices, the reason for high food prices is actually increasing food demand and increasing demand for complex food due to rising consumer wealth in, you guessed it, China and India - coupled with reduced supply due to droughts in US and Australia).

    In addition the high oil price is driving exploration in places that were less prospective at low prices and other types of oil, such as oil shale (which makes Canada actually 2nd to Saudi in oil reserves). That gives me some comfort at least!

    It is also driving research into efficiency, making Americans buy smaller cars, increasing the probability that more nuclear and renewable power stations will be built rather than fossil fuel fired power stations - all of which have ancillary benefits of being good for the environment and good for a diverse range of other industries.

    Nothing is every 100% bad.