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View Diary: Exxon CEO: Oil Price is 9x Higher than Production Cost (75 comments)

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  •  The price of oil (11+ / 0-)

    is set in dollars.  And the dollar is at a three year low against foreign currencies due to inflationary policies such as QE2.  Claims of global demand destruction can only be made by cherry-picking narrow time frames, as broader charts show an inexorable rise in demand for oil to fuel China and India's adoption of our fossil fuel addictions.

    I don't think oil companies are any greedier or smarter than they've ever been.  The dollar's slide, plus supply shocks from Middle East unrest, are what drives the fear that drives the speculators.  Their effect on prices is just that, speculative, and the fundamental costs of oil for the US consumer is going up because of this simple fact:

    The bottom half of American income earners are losing oil consuming power to the top quarter of Chinese income earners and the top one tenth of Indian income earners.  Much as we feel it's our God-given right to drive cars anywhere and everywhere,  we are going to have to face up to the reality that this is going to change as global consumers gain the ability to simply outbid American consumers for the available (and rapidly dwindling) supply of oil.  

    The solution lies not in theatrics like congressional hearings to unmask the oil speculation conspiracy. Any oil shortage is ultimately connected to our inability to put more dinosaurs into the ground.   Reducing our dependence on fossil fuels, such as increased mass transit and alternative energy, is the real answer.  

    "Welcome to Costco, I love you" -- Greetings from "Idiocracy"

    by martinjedlicka on Sun May 22, 2011 at 11:09:28 PM PDT

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