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The Reuters headline reads: OPEC Sees No Quick Fix for Oil Prices. The story basically says that $40 a barrel for crude may be here for a while. The reasons, though, are a little more interesting -- at least according to this snip:
U.S. refinery bottlenecks, Middle East security worries and heavy speculation on crude futures by investment hedge funds have all helped drive up oil prices.Note especially the artificial increase effect from the investment hedge funds driving up futures prices. I used to say it more often when I was closer to that business: these MBA and CFA traders are doing stupid things to the underlying economy.
Frankly, none of us would give a crap about the whole thing except on a macro scale it threatens economic growth that's just starting to take hold. And, at a more micro-level, it makes me sad to see prices at the pumps over $4 a gallon (that a pretty conservative guess at $0.91/litre turn into). I remember when it was $0.35/gal. Or should I have let everyone know that?
Posted by Grayson at May 21, 2004 07:27 AM