Yesterday OPEC President Chakib Khelil said he believed oil prices could rise to between $150 and $170 a barrel this summer. So what happens. Oil hits a record high of $142 by today.
The record is blamed on the enduring devaluing of the US dollar, which continues to lose value because of the dumping economy, which continues it’s downward spiral on the back of the skyrocketed energy costs. So, is it the chicken or the egg? But investors jumped on the oil bandwagon once again yesterday on Khelil’s news as a hedge against inflation because it’s a sure bet when OPEC controls such a large portion of the world’s oil production.
Oil prices between 2000 and 2007 averaged below $40 per barrel and have nearly tripled over the past year on concerns about rising demand in fast-growing economies such as China and India, and supply disruptions in the Middle East and Nigeria. But just recently, the head of Libya’s national oil company said the country may cut crude production because the oil market is well supplied, according to news reports.
So, what’s the answer? Any answer that keeps us from knowing how much and accessing more of our own energy reserves has to be the wrong answer. It will not matter if we develop alternative forms of energy for the future if the future is a very weakened US due to bad policies that allowed the economy to continue to be driven into the very holes the oil is coming from.