Oil - Demand, Supply, and President Bush, pt 3
Posted by Moonage on 02 Sep 2004 | Tagged as: Oil Supply
TMFOtter : Two things: first, perhaps I’m misunderstanding you, or vice versa, but my original point was that the imports into the US of oil are higher in the last two months than at any point in the past decade. It is a long time, therefore, to determine whether problems in Iraq have a causality to the supply/demand imbalance and thus prices, and as such it is ahorribly relevant period of time.
Further, we’re not talking about Iraqi output. The question here is prices of oil and oil products in the United States, and as such the question is how much Iraqi oil reaches our shore. Given the above statistic, even with disruptions in Iraq the overall impact of Iraq should be a net positive on pricing on spot.
Well I suppose we both misunderstood eachother.
I wasn’t directly answering wrt to the oil prices, though I do agree with Calpinist’s and KBM’s analysis about the speculation premium. (Still do even afer the additional info you gave) I rather wanted to point out that one of your arguments, Iraq producing more oil now than in the last decade, seemed incorrect, or rather irrelevant to the point that I thought was being made. (Responsibility of G.W.Bush on oil price)
To compare the effect of the Bush policy on Iraq oil output, one should not take into account a decade, including the years immediately after the first Gulf war. G.W. Bush’s actions replaced a policy of confinement and a UN oil-for-food program by the current situation. So, these are the two situations that should be compared, and doing so shows that Iraq now produces and exports less oil than it was doing before Bush’s agressive ME policy kicked in.
If you were talking about prices of oil and oil products in the United States then I was totally misunderstanding you. I thought the discussion was about the world market price for crude oil (48-49 $ a barrel at the time). I still think that, like Calpinist and Kent said before, there’s a hefty bit in there that comes from speculation and fear about the M.E.. The drop to 42$/barrel after the Najaf crisis was resolved, seems to be a further indication of that.
As for G.W.Bush’s role in the speculation premium, let’s not forget his policies also greatly enhanced fears for a new war in Iran. If that scene gets hotter and if, God forbids, war breaks out there also, I predict that the premium of oil price due to G.W.Bush’s failed M.E. politics will become unmistakably clear to everyone. I ‘m pretty sure the premium is already there though and guesstimate it’s good for several dollars, simply based on the 5-6$ rise as the Najaf crisis was nearing its climax.
I’ll try to address several posts at once, starting with this from T. (BTW — any hints on the origin of your screen name?)
Argh. That’s like asking a hobbit if he could give some hints about his family tree. Do you want me to sit here typing for the coming two weeks or what ?
(I’m pretty sure I already talked about it here, but alas, the TMF search function is totally hopeless to find something like that back. My apologies to people who already read this)
Tarasicodissa is a real name. The one my screen name refers to is Tarasicodissa Roussoumbladeotes the Isaurian (Isauria is the region south of the Taurus mountains in Anatolia). He later changed his name to Zeno as he married into the Byzantine empirial family. He then ruled the East-Roman empire from 474 to 491.
I think it was a rather interesting time. (in a Chinese kind of way) He wrested the Byzantine throne from German control in a long series of civil wars. In Italy meanwhile, the German Odoaker deposed the western emperor. Once Zeno got his act more or less together again, he decided not to try to restore the western empire, giving Italy to Theodoric’s Ostrogoths instead.
He may not have been the most important or most interesting emperor, but certainly the one with the most rythmical name. That may be the major reason for my choice.
More bio’s come up when you type Tarasicodissa in Google. Ignore the first entry ’cause it will take you right back to TMF. (Something which I don’t particularly like. I would prefer if TMF put a “no-search-robot-please” flag in its board and profile pages.)
T.
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