ECON: The price of oil

From: Mike Lorrey (mlorrey@yahoo.com)
Date: Sun Mar 23 2003 - 11:15:53 MST

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    I believe that a month or so ago, I made repeated predictions that the
    price of oil would drop within a week of the start of the war to below
    $25/bbl and would be around $10/bbl by a year from now. Others disputed
    this and claimed it would go to $50/bbl or more. It appears that my
    prediction is coming true. Brent crude is now below $25/bbl, losing
    $1.15 yesterday alone.

    US and British forces have successfully captured oil platforms and
    loading facilities as well as many southern oil fields with relatively
    little sabotage to well facilities by Iraqi forces. Some were captured
    within hours of being sabotaged, apparently, and it appears that 31
    special forces teams were inserted across Iraq more than a week ago to
    not only target ballistic missile batteries but to eliminate oil
    sabotage teams.

    This is not only of paramount importance to the world energy markets,
    it is a triumph of environmental protection in wartime. I damn well
    expect the Greens to line up in thanks to any US or Brit soldier they
    come across (but I doubt it will happen). I expect the socialists and
    other lefties in France are somewhat conflicted (as are lefists around
    the world). While they can't avoid the fact that a major environmental
    disaster of historic proportions was averted, they also have to face
    the fact that tanking oil prices will cut off oil tax revinues to
    social welfare bureaucracies.

    I now make a second prediction (I might have already made this one): by
    this time next year, european governments will have a funding crisis,
    forcing them to either jack up taxes or cut support for welfare programs.

    =====
    Mike Lorrey
    "Live Free or Die, Death is not the Worst of Evils."
                                                         - Gen. John Stark
    "Pacifists are Objectively Pro-Fascist." - George Orwell
    "Treason doth never Prosper. What is the Reason?
    For if it Prosper, none Dare call it Treason..." - Ovid

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