Oil may hit $50 soon. That's what many
market anaylists think:
U.S. light crude struck $44.24 a barrel midday, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. It settled at $44.15 a barrel, up 33 cents on the day.
London's Brent crude followed suit, scoring $40.52 a barrel, a level not seen since the
run-up to the first Gulf War when it hit an all-time high of $40.95. It settled up 67 cents to $40.67.
"It's just up, up and away. There's no stopping it," said Edward Meir, an analyst at Man Energy, adding some brokers believed U.S. oil at $50 a barrel was no longer inconceivable.
Three things are apparently driving oil prices up:
1. Fear of a disruption in the flow due to instability near the source (hmmm...who caused that?)
2. Lack of spare capacity cause by:
3. Higher than expected oil consumption in China.
High gasoline prices caused the economy to "hit a soft spot" in June, according to Alan Greenspan. And while he's still optimistic about the future, today's events cannot be helpful.
Does this mean the economy issue could actually benefit John Kerry in November? Possibly. In fact, they could hit a political home run if they follow my plan:
1. Tie the economy to the war in Iraq. If oil prices are causing economic misery, it's Bush's fault. His meddling in the Middle East has disrupted the flow. It's beautiful. Poor foreign policy choices lead to domestic pain.
2. Continue to push independence from Middle Eastern oil. Mention Saudi Arabia quite a bit in your rherotic. Blame our inability to break the grasp of foreign oil dependency on Bush's close ties to Saudi Arabia and oil companies. In other words: blame high gas prices on Bush's cozy relationship with oil barens. Now there's a corporate conspiracy that I can get behind (because it's real).
Of course, running on gas prices could be dangerous for Kerry, since he has proposed a gas tax hike in the past. If they try to throw that on Kerry, make sure you pull out this quote:
In October 1986, when Dick Cheney was the lone congressman from energy-rich
Wyoming, he introduced legislation to create a new import tax that would have caused the price of oil, and ultimately the price of gasoline paid by drivers, to soar by billions of dollars per year.
"Let us rid ourselves of the fiction that low oil prices are somehow good for the United States," Mr. Cheney, who is now vice president, said shortly after introducing the legislation.