16 September 2012, get ready for higher oil prices!
Iranian officials in the Organization of the Petroleum Exporting Countries (OPEC) said the real price per barrel of oil should be around $150 USD. Their reasoning varied from the time of the year, to comparisons of prices by inflation (1970s compared to 2000). They even said the World economy can handle much higher prices.
Not sure if they are talking about British Brent crude prices, or U.S. West Texas Intermediate (WTI) crude oil.
On 14 September 2012, Brent crude went over $117 USD per barrel.
Reading a Canadian report, turns out that’s still not high enough! The Canadian province of Newfoundland/Labrador have set their government budget in the hopes that Brent crude will go over $124 USD per barrel. The province makes most its money off oil production.
In fact, because Brent hasn’t hit the magic money mark, yet, the provincial Premier, Kathy Dunderdale, had to cut their budget: “I’m not so worried about this year. I’m more worried about next year. Because if oil stays where it is, our deficit could be around $1 billion [CAD] next year.”
In other words, some governments, who’s major money making industries happen to be the oil industries, want oil prices to skyrocket!!!
However, Iranian OPEC officials say the United States is trying to bring down oil prices, by demanding OPEC members increase oil production.
A few years ago I read an article that explained that most oil producing countries (including members of OPEC) would be losing money if oil were less than $90 per barrel.
So, the reason why the U.S. wants to bring down prices, while other countries want prices to go up, could be that the U.S. domestic oil industry can handle lower oil prices (except for shale oil). Most other countries have higher oil production costs (like Canada) because of the type of oil and labor costs.
The U.S. model is a kind’a WalMart tactic; keep prices cheap and sell as much in volume as you can until your competition quits.
So what we have are those who want oil prices even higher than they are now, and those who want them to drop. Is this the real shadow war taking place behind the deadly facade of War on Terror, sanctions and insulting other people’s religions?