Oil Will Spoil the Recovery

June/08/2009 15:02PM
Write Comment
Please follow and like us:

It’s already starting. The price of crude oil has doubled since March. It’s presumed to be the speculators again. The smart guys who think inflation is a given and the dollar will continue to fall, making oil more expensive. But, the other wild card is the demand in China. Since China holds demand and inventory data close to the vest, no one is really sure this isn’t the culprit.

It really doesn’t matter. OPEC is keeping supply low. Green shoots in the US economy, if they really mean a recovery is starting, mean demand will be increasing here as well as other countries where a recovery may be underway. China bought 60% of the available iron ore last month. If demand starts to pick up, prices will continue to go up. If the congress passes cap and trade prices will go up. If the dollar falls, the price will continue to go up.

The State Controlled Media in this country will be on this soon. Congress will be incensed once again. The same old bad guys will be blamed by both. Big Oil. But, Big Oil is pretty indifferent today about the US.

The Chicago Tribune blasted the BP refinery in Whiting for exceeding EPA regulations on benzene. The same paper blasted the old Clark refinery in Blue Island, Illinois, for years. It closed. If BP chooses to close the Whiting, Indiana, refinery, rather than take any more heat or invest any more money in a refinery that was built by John D. Rockefeller, it will double gasoline prices in the Chicago market overnight. The pipeline from alternative sources is full. Barging gasoline from the Gulf Coast is the only alternative. And there isn’t enough water terminal capacity in the area to handle the demand. Chicago will be an island isolated from gasoline supply alternatives.

This same stupidity is the real reason we can’t get out of the recession. Environmental dreamers, who think battery operated cars can be produced and replace SUV’s overnight, are dead wrong. No drilling, no nuclear, no coal, global warming, cap and trade, and no conventional supply in the short term. We will be hostage once again to the foreign market. China has been writing long-term contracts with foreign oil- rich countries. China has been building nuclear plants at an alarming rate. China has been building coal fired power plants as fast as they can. China has a huge dam project about to go on stream. China has plans to keep their economy growing. The US. has dreams. Dreams that will turn to nightmares.

It’s etched in stone. No way out. You will see things get worse, not better.

Please follow and like us:

Other Articles You Might Enjoy:

Leave a Reply