Party time….for some
Reuters reports mischief at home and abroad that is causing oil to continue to spike in the face of obvious demand destruction and as the stock market plummets to two year lows:
Oil prices surged to a record over $140 a barrel…”The crude oil market spiked sharply higher in early trading after Libyan National Oil Company chief Shokri Ghanem said that Libya was considering a production cut,” said Tim Evans…Ghanem, Libya’s most senior oil official, said he was studying the possibility of reducing production in response to a bill before the U.S. Congress that would empower the Justice Department to sue members of the Organization of Petroleum Exporting Countries for limiting oil supplies. “We are studying all the options,” Ghanem told Reuters. “There are threats from the Congress and they are taking OPEC to court, extending the jurisdiction of the U.S. outside the U.S.”…
OPEC President Chakib Khelil said in an interview Thursday that prices could reach $170 a barrel in the coming months, and he reiterated the cartel’s position that speculation — not a supply problem — was driving oil to new highs. “I forecast prices probably between $150 and $170 during this summer. That will perhaps ease towards the end of the year,” Khelil told France 24 television, according to a text of the interview released by the station. “I think that the devaluation of the dollar against the euro, if everything goes as I think it will, will be of the order of perhaps 1 to 2 percent, and this will probably generate an $8 rise in the price of oil,” he said.
Oil prices fell on Wednesday after U.S. government data showed a surprise build in the crude inventories of the world’s top consumer as demand continued to drop.
Why do we think that some of these parties are talking their book? (Finally, given these absurdities, maybe we were correct that a new Great Depression could cause oil to go to $500 a barrel.)