Oil and the Seduction of the World
Lets try this from a different angle, if I have something that everyone in the world wants I am in a good position no doubt. Now lets start at the beginning, say around 1999, and close 26 refineries between 1999 and 2001 on the West Coast alone. At that time frame crude was relatively dirt-cheap, now lets do some merging over the next 5-6 years in which we end up with 5 major oil firms. Even today, oil is pumped out of the ground in Saudi Arabia for around .25 a barrel, so it was real cheap in 1999. Then in 1999-2001 Phil Graham re-writes the futures commodity legislation and opened the door for hedge funds and future buying in the speculated market in energy. Which led to the Enron mess, the Prime-Lending disaster, also traders do not answer to anyone here in the US and purchase fees are cheap enough that the can purchase large shares in the crude oil market with out any intention of using the oil, just sit on the contract until the three month period is up and then sell at a profit if possible. No one can deny the huge net profits of these companies over the last 8 years or the balance sheet they are caring today. Not to mention the fact that all 5 of the major oil companies are currently buying their stocks back at record levels today. It is reminisce of the Hunt brothers and the cornering of the silver market, ah, but they got caught. Energy companies are currently giving millions to the lobbyist in Congress right now to kill green energy programs. And they are giving so much that they will spend millions more this year then last year. (opensecrets.com)
A de-facto tax cut for American motorists. Each $1 per barrel drop in oil increases U.S. GDP by $100 billion per year and every 1 cent decline in gasoline increases U.S. consumer disposable income by $600 million per year.