Opinion Editorials, July 2006, To see today's News, click here: www.aljazeerah.info
Oil Prices Settle at $77 a Barrel, This Time Caused By Israeli Attacks on Lebanon
By Hassan El-Najjar
Al-Jazeerah, July 15, 2006
In previous sudden increases in oil prices, I noted that statements by President Bush and his Secretary of State, Condoleezza Rice, about attacking Iran would cause the increases. I wrote about that (See Bush and Rice Statements about War on Iran Behind Pushing Oil Prices to $75 Per Barrel ).
I haven't noticed any threatening statements by Bush or Rice after that. It seems that the Israelis are the ones who are doing it this time. Crude oil traders need a political event like war or the threat of war to increase the prices of oil to the level they want. Then, they sell, reaping billions of dollars.
Diplomacy works after that to cool things down. So, oil prices come down. When they are low enough for them, they buy huge quantities of crude oil.
They wait to the following political incident that the beneficiaries influence, then prices increase, then they sell, and so on and so forth.
The evidence shows that we're living in an era in which the oil industry dominates the global economy, have agents who launch wars and manufacture instability, in order to allow the beneficiaries of the industry to reap billions of dollars each time there is a price increase like this.
The Israeli assassinations, raids, sanctions, financial strangulation of Gaza Strip aimed at triggering a Palestinian reaction. When this finally happened (the soldier capture), it was used by Israelis to launch a campaign of death and destruction destabilizing the Palestinian government and literally starving the Palestinian people.
When Hizbullah made its similar move (the two-soldier capture), it was also used by Israelis to launch the current war of death and destruction on the entire country of Lebanon.
Who knows, maybe the plan of the oil industry and its beneficiaries turn to be the occupation of Iran. In this case, we've just seen the skirmishes of the coming nightmarish war.
Oil Prices Settle at $77 a Barrel
By BRAD FOSS AP Business Writer
Jul 14, 2006, 9:42 PM EDT
WASHINGTON (AP) --
The price of oil briefly surpassed $78 a barrel Friday and finished 4 percent higher for the week after Israeli terrorist attacks against Lebanon stoked fears of a wider Middle East conflict and possible oil-supply disruption.
The run-up in oil raised concerns about inflation and the economy at large, sending stock prices tumbling. OPEC tried to reassure the market by stressing its commitment to "order and stability," but at the same time said it "has no influence" over the geopolitical turmoil underlying today's volatility.
Because oil accounts for more than 50 percent of the cost of gasoline, U.S. pump prices, now averaging $2.96 a gallon nationwide, are likely to climb some more, analysts said.
On Friday, light sweet crude for August delivery on the New York Mercantile Exchange soared as high as a record $78.40 a barrel in electronic trading before settling at a record $77.03, an increase of 33 cents from Thursday's record close.
Gasoline futures rose by 2.36 cents to settle at $2.3249 a gallon - the highest level since late September of last year, when U.S. refinery output was sharply curtailed by hurricane damage.
In London, Brent crude futures gained 58 cents to settle at $77.27 a barrel on the ICE Futures exchange.
"We've reached a level where we've put all the scare premium into the market that we can," said James Cordier, president of Liberty Trading in Tampa, Fla. "At this point, we have to have a disruption to move smartly higher from here."
Cordier said that while fuel demand in the U.S. is still strong, rising energy costs appear to be dampening consumer spending in other areas and that could eventually slow the economy enough to help cool energy prices.
But there won't be any significant decline until at least the end of the summer, and that assumes that the Gulf Coast sustains no serious hurricane damage this year.
Israel widened its offensive on Lebanon on Friday, with fighter bombers blasting the airport for a second day and cutting off the main highway to Syria. Hezbollah has fired more than 100 rockets into Israel. More than 80 people have died, most in Lebanon, in three days of violence sparked by the capture of two Israeli soldiers by Hezbollah militants.
While Israel and Lebanon are not major oil suppliers, the fear is that the conflict could expand in the region, which produces nearly a third the world's oil and has almost two-thirds of its untapped reserves.
Iran has threatened to use oil as a weapon if the United Nations invokes sanctions in its dispute with Tehran over its nuclear program. While OPEC's No. 2 supplier has not raised the issue of withholding oil from the market in a sign of solidarity with Hezbollah, the possibility - while deemed unlikely - weighs on the market's psychology, analysts said.
"I don't think we're done on the upside," said BNP Paribas Commodity Futures broker Tom Bentz, referring to the rise in oil prices.
The Organization of Petroleum Exporting Countries issued a statement in which it blamed geopolitical factors beyond its control for the recent price volatility. The group emphasized that the market is "well-supplied with crude."
Indeed, oil prices did not arrive at the doorstep of $80 a barrel overnight. The combination of rising global demand, limited excess production capacity and concerns about supply interruptions from Nigeria to the Gulf of Mexico have all played a part, analysts said. So, too, has the influx of billions of dollars into oil markets in recent years by hedge funds and other financial institutions angling for profits amid global instability.
Brent for August delivery at London's ICE Futures exchange, which expires at the close of trading Friday, jumped as high as $78.03, but then fell back to $77.46, up 77 cents.
In other Nymex trading, heating oil futures fell less than a penny to settle at $2.076 a gallon and natural gas futures advanced 21.8 cents to settle at $6.347 per 1,000 cubic feet.
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