JREwing

G-7 Central Bankers Stymied By 'Crude Oil Vigilantes'

I am neither pro Bush nor contra Bush. (In fact I don't think much of politicians in general)

But the author devalues the facts he presents in this article with his Bush-bashing.

While the author correctly cited a sharp increase in demand (and future demand) in the BRIC countries, he fails to understand, that the real reason for this seemingly indestructible oil market is not the FED or the Bush administration, but the governments in the BRIC nations, who subsidize petroleum products with their huge trade surpluses.

The high oil prices (along with the housing slump) destroyed demand for 400.000 barrels per day in the UNITED STATES.

How can there be demand destruction in the BRIC nations, when the governments there let the prices for gas and diesel appreciate only very slowly?

The BRIC nations act like a huge STOCK-BUY-BACK-PROGRAM for the oil market.

Just as a stock with a formidable buy-back-program in place is unlikely to collapse, so is the oil market unlikely to collapse.

Since oil is such necessity, it seems that any decrease in price would be met by an increase in demand, provided the world economy is not in a severe recession.