So as the price of oil crosses that big fat red triple-digit line in the sand, we take a look at how the media is reporting it.
Oil prices, after taking an initial dip on a weekly government report on inventory levels, crossed the $100 threshold Thursday and continued a six-year, five-fold spike driven by surging demand and limited supply.
Wait, what? Surging demand and limited supply? Are you kidding me? Has anyone in the media noticed the major world events in the Middle East that just might have something to do with the price of oil? You’re seriously telling us it’s supply and demand?
The inventory report is just the latest mover in a market that is hyper-sensitive to news. Oil prices have surged five-fold in the last six years, going from under $20 a barrel in early 2002. In 2007 alone, crude jumped nearly 60 percent.
Most analyst blame the runup on rising demand – mostly from developing countries and the U.S. – that eats up any new gains made in oil production.
Yep. It’s your damn fault. You and various brown, ethnic people living in crappy countries. Five-fold price in oil of course means that you’re driving five times more than you were in 2002, right?
Now that’s a simplistic view of the complex dance that is the legalized oil racket, but it’s the story itself that distills this down to “surging demand and limited supply”. Peak oil or not, oil just isn’t that simple, and it certainly isn’t solely the fault of the American driver that oil rocketed up 400% in six years.
Oil companies have posted record profits for the last few years. While their budgets for finding new oil have increased, most of the windfall has been returned to shareholders in the form of dividends and share buybacks.
The companies – and oil industry analysts – say vastly increasing spending on oil and gas exploration won’t do any good, as there’s only a limited amount of equipment and manpower available for the task. Plus, many analysts say new, big oil fields are getting harder to find, especially in countries friendly to Western oil firms.
Oh, well here’s part of it. Somebody want to explain to me another industry that’s making record profits in the history of American business and yet says investing in more of their product will do no good?
And of course the whole “friendly to Western oil firms” is a nice little aside. Perhaps we should be going out into the world and making them friendly to us. It’s worked so well in Iraq.
Here’s my favorite quote from the article:
Retail gasoline prices have not risen as fast as oil prices over the last few months, largely due to weak demand.
Except of course it’s surging demand that has raised oil prices. Funny how that works.
The lies are as thick as…well…crude oil.
