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I think that today's $90+/bbl price of sweet crude has a "Dubya Premium" (war mongering tendency) built into it. When the GOP loses the next presidential election, I would almost bet my house that the oil price drops in the tens of percentage points.
7 dollars a gallon for gasoline wouldn't likely cause a recession. It would cause a depression. It would definitely destroy the economies in those red states. Millions of people would be instant paupers due to inflationary presures and the struggle to afford transportation. It wouldn't be pretty in blue states, either. Lots of people up north would freeze, plus the costs of items in stores would go up as well.
War with Iran is like playing Russian roullette with an automatic pistol. I think it is mostly talk at this point and if Bush & Co. ever try it, there will be consequences for them and they know it.
War with Iran is like playing Russian roullette with an automatic pistol. I think it is mostly talk at this point and if Bush & Co. ever try it, there will be consequences for them and they know it.
I think starting a war with Iran in this political climate would be politically suicidal. I would not be surprised if it actually happened. Consider the personalities involved.
If it does there will be personal responsibility for the perpetrators because a new President would be forced to open up the secret archives to investigation and prosecution. The debacle surrounding the illegal kidnappings, torture and murder of people by our clandestine intelligence service and military would be the tip of this pile of corruption. I think this is why there may be an incident that will cancel the elections and the change of presidents. The current bunch, and a whole lot of past administrations, cannot afford to be brought to trial for their atrocities.
I think starting a war with Iran in this political climate would be politically suicidal. I would not be surprised if it actually happened. Consider the personalities involved.
I would be surprised if it did. Bush has what, 14 months in office left? He's dealing with an ornery Democrat Congress who would stomp and wail over funding; those bills would bounce back and forth ad nauseam. We also don't have the troop strength to invade Iran; we don't even have the troop strength to effectively occupy Iraq and Afghanistan, unless we want to start pulling troops off the South Korean border.
I think that today's $90+/bbl price of sweet crude has a "Dubya Premium" (war mongering tendency) built into it. When the GOP loses the next presidential election, I would almost bet my house that the oil price drops in the tens of percentage points.
It has what you can call a "Dubya Premium" in terms that political instability in oil producing countries will raise prices because the market factors this into the price (investors, speculators, etc). Just like, historically, the stock market goes down a few percentage points when a democrat president gets elected vs. a republican president. But the question is will the market percieve instability improving when another president gets elected - my guess is very little, except maybe for short term changes, because instability will still exist in the middle east and realistically the market knows that political changes in the U.S. are not that drastic in terms of quick changes. A war in Iran will of coure raise oil prices but, ironically, oil prices will probably go up also if the U.S. decides to totally turn it's back on issues in Iran and Iraq (pull out of Iraq, cease all diplomatic manuevers to prevent nuclear weapons in Iran) because, again, it will cause more instability.
I don't think you're getting my point. How is the Middle East more unstable today than 2 or 3 years ago? In the meantime, oil has increased $30/bbl. The difference is that the market perceives Dubya as being more likely to invade Iran than 2 or 3 years ago. There's no reason to postulate some kind of amorphous 'instability'. It's Dubya's increasingly aggressive foreign policy toward Iran that has changed.
I don't think you're getting my point. How is the Middle East more unstable today than 2 or 3 years ago? In the meantime, oil has increased $30/bbl. The difference is that the market perceives Dubya as being more likely to invade Iran than 2 or 3 years ago. There's no reason to postulate some kind of amorphous 'instability'. It's Dubya's increasingly aggressive foreign policy toward Iran that has changed.
OK I didn't think the view was that extreme. Surely you don't blame all the oil increase on Dubya? The increase in oil prices is varied but it's mostly due to, simply enough, increased demand - mostly in China and India, and some oil refining limitations in the world market. Political instability in the middle east has some influence, but not that much, and the middle east has always been (probably always will be) unstable. Sorry guys - don't expect some miracle price drop at the gas pumps when the "Evil Bush's" term is done.
A lot of the increase we've seen in the price of crude oil has been due to the war in the middle-east. Oil is a commodity that's sold on the open market. A war in Iraq, and a threatened war in Iran, affects the price of crude being pumped out of Mexico and Alaska and elsewhere.
However it should be noted an increase in price doesn't necessarily mean an increase in production cost. Which is why the oil companies are so happy right now. They're making out like gangbusters. It should be noted however, that the price is also being driven up in the US by not building more refineries here. By limiting the number of refineries in the US, supply and demand of the refineries drives up the price as well. Especially considering the vast number of regional brands of gasoline that we have, and the fact that the oil companies frequently take a refinery off line to perform routine maintenance, even if another is broke down. The limited number of refineries that we have can only do so much. And the less space that's available for oil to be processed, the higher the price the gasoline will be.
But as far as the price of crude goes, we need to keep in mind it's still MUCH cheaper than even bottled water. Considering the work and energy we get out of even just one barrel of crude we are still getting it at quite a bargain even at today's prices. If the price of crude increases it would have to double in price, or even triple before it had a major effect on our economy. For the simple reason people would cut their budgets elsewhere if needed, or even cut back on their driving.
But to answer the OP's question, "Is there a Dubya Premium in place for the current price of our oil?" Of course there is. And for the most part it's going straight into the pockets of the oil companies as they continue to record profits quarter after quarter.
the increase in oil price is due to the increase in demand around the world and inthe united states, it is that simple. it is just slightly ironic that the people who were against trying to develop our own oil reserves are now placing blame when the price of oil goes up.
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