Oil, The Blame Game

Its now an official game of blame. Who is responsible for the current price of oil at US140 per barrel.

Big Oil Companies (when doing their PR in their home countries): They will blame speculators for driving up oil prices. As they are spreading propaganda to the general public, they have to divert attention from themselves. The big oil companies fear that their own government will whack them with big windfall tax on their earnings.

Big Oil Companies (at major international conferences): When they are away from their home ground, they will blame the situation on inadequate supply. They will blame it on countries with supposed oil reserves. The big oil companies want the international spotlight on these countries so that these countries will be pressured to open up their locations to allow more joint ventures with big oil companies.

OPEC: They do not want to be pressured to pump more oil. Their blame game is back on the speculators. They also rather focus the increase in demand side, and would state that their supply growth is steady. Just because demand is rising faster than OPEC's supply, that is not OPEC's fault. They would try to deflect criticism on the demand side, including China and other emerging markets.

Countries Cutting Oil Subsidy: They would have to blame it on speculators or something external so that the decision would seem to be forced upon them, when it was bad planning to start with. Many of these countries should have been weaned off subsidies long before the proverbial stuff hit the fan.

Speculators: Well, they would want to be regarded as investors now, now that they are taking along their profits on such a good thing. Careers and fortunes have been made by just going long on oil for the past 3 years. They claim that since they have been going long, taking profit, and going long some more, they should be classified as investors - even though they now account for the majority of futures trade in oil, and have no bloody intention to consume.

Oil & Gas Companies: They provide the equipment and physical asets to allow for more drilling, they don't care who is to be blamed for the oil price surge. The higher the price, the greater the number of jobs as more difficult wells become viable and more complex technologies are employed.

Political Pundits: Mostly arguing that oil had been kept artificially low by US interests for far too long, and now thanks to the debilitating economic conditions in the US (hence USD) and a more liberal global political landscape, oil is finding its true mean.

Traditional Economists: Its a simple demand and supply equation. Not so much that supply is unable to match demand, but rather that the low hanging fruits, the easy oil has all been harvested and identified. The higher price of oil basically means the market is forcing players to spend more, invest more to find the more difficult oil.

Libya, Cuba, North Korea: Its another American conspiracy.

p/s photo: Aum Patcharapa Chaichua