DemocRats called the Iraq War "Blood for Oil" Now they
have shut their flapping lips.
Iraqi oil minister Ibrahim Bahr Al-Ulum, representing occupied Iraq at the OPEC meeting in
Vienna, came out in favor of the production cutback
Analysts attribute the high U.S. gas prices mostly to a robust domestic demand, limited
refining capacity and concerns about possible shortages in blending components for
reformulated gasoline.
OPEC decided to keep prices high by cutting production 4 percent, or one million barrels a
day. The Wall Street Journal sees this step resulting from budgetary needs in Saudi Arabia
and a weaker U.S. dollar, and it anticipates major consequences from it: "The move
confirms the cartel's abandonment of its years-old efforts to maintain price stability and
raises the prospect of greater volatility for consumers of oil and petroleum."
Not surprisingly, this Saudi-led step met with disapproval in Washington. The President is
disappointed in the decision. It is important that producers should not take steps that
harm American consumers and our economy.
Libya’s bin Shatwan sought to deflect criticism of OPEC for the high prices by
claiming that the recent plunge in the value of the U.S. dollar has added about 30 percent
to the price of crude. Oil is denominated in dollars.
‘‘The real value of oil right now is maybe $20,’’ he told reporters.
Saudi Arabia’s oil minister Ali Naimi blamed investors and speculators for driving
prices up to 13-year highs and said that current prices have absolutely nothing to do with
supply and demand for crude. He said OPEC must reduce its output target as planned,
arguing there was already a surplus of crude and that adding more oil now would further
weaken the soft market expected in the second quarter.
Naimi found support from at least two OPEC counterparts. ‘‘I feel we should go
with the cut,’’ said Libyan oil minister Fathi bin Shatwan. ‘‘The
supply is enough in the market. Maybe there’s a bit of oversupply even.’’ |
