Oil Prices And Harbingers Of Doom

[UpInArms]

http://www.forbes.com/business/energy/2004/05/12/cx_da_0512topnews.html

NEW YORK - At the start of the Iraq war some cynics said the "real" reason for the war was "oil," though it was never really clear what they meant. If they meant the idea was to get cheap oil from the Middle East, today's news that oil prices have again spiked above $40 per barrel would have been a shock. But if the idea was that oil companies and oil services companies would do well, they may have a point, though these particular cynics still have the problem of proving cause and effect.

U.S. light crude topped $40 per barrel--less than $1 off the all-time high of $41.15 for New York crude futures, reached in October 1990 after Iraq invaded Kuwait. There seem to be two schools of thought on the reason for the recent climb. Some blame increased demand from growing industrial countries, especially China. Others credit supply disruptions caused by recent attacks on oil facilities in Iraq and Saudi Arabia.

<snip>

But these higher prices benefit producers such as OPEC nations and oil companies. Profits of major oil concerns like Exxon Mobil (nyse: XOM - news - people ), ChevronTexaco (nyse: CVX - news - people ) and BP (nyse: BP - news - people ) are up sharply in the past year, as are their share prices, which hit recent bottoms right at the start of the Iraq war, though that may be a coincidence.

The fortunes of oil services companies like Schlumberger (nyse: SLB - news - people ) and Halliburton (nyse: HAL - news - people ) have turned even more sharply. Schlumberger's share price is up by 48% since the start of the war; Halliburton's is up 42%, though it is still well below where it was at the time Dick Cheney, the company's former chief executive, became vice president of the United States. Wall Street is bullish for continued gains as Bear Stearns, Morgan Stanley and Lehman Brothers have all in the past year upgraded their ratings for Halliburton shares.

...more...

[ixion]

1. cause and effect

okay, this guy is trying to redefine the argument, by pretending to not understand what us 'cynics' have meant by a war for oil.

First off, the first words out the *'s mouth when he decided to illegally invade Iraq were these:
"Do not touch the oil fields."

That was before ANYTHING else. But the real idea, the one this writer pretends not to get, is this: given that Iraq has the second largest oil reserves in the world; and, given that Hussein posed NO IMMINENT THREAT to the US,

We can therefore conclude that that:

A primary factor behind the invasion of Iraq was to get ahold of it's oil reserves, with the thought being that within no time at all the fields would be pumping millions of barrels of oil that would essentially be under control of the US.

What is so darn hard to understand about that?

[nodictators]

2. This Forbes article is pure crap

"...some cynics said the "real" reason for the war was "oil," though it was never really clear what they meant.

How stupid can the author of the Forbes article, Dan Ackman, be? He can't understand what the "cynics" meant?

Obviously, Bush and Cheney and other PNACers wanted the 200 billion barrels of oil in Iraq. Cheney even had maps of Iraq chopped up into tracts for oil leases. Those maps were obtained by Judicial Watch, a very conservative outfit.

Bush, Cheney, and bin Laden all wanted higher prices. Osama wanted oil to cost at least $50/barrel. Before the invasion, our phony news media was floating stories that the takeover or Iraq would produce cheaper oil prices: $20/barrel. Some DU posters bought the media fantasy. I posted on DU a year ago that if BushCo grabbed the the Iraqi oil that prices would go up, not down.

It was a case of "we've got it, you want it, so we'll make you pay through the teeth."

[gasperc]

3. higher prices will also mean less consumption

for sure, as prices rise oil companies will make a greater profit. But by the same extent, the higher prices will lower consumption so in the end, they may have increased their margin but they are selling less gas/oil and as we all shop around for better prices it'll make competition fierce.

However, I am mostly talking out of my ass, since these prices totally suck(paid $2.01 today) and I'll run my air less but I got to get back and forth to work, etc. Although, I see a tiny silver lining which is SUV sales may plunge and hybrid sales will soar and hopefully push for more hybrid vehicles...lets wait and see.

[catmandu57]

4. I think that oil wasn't meant for domestic use anyway

China and India are booming right now, we've exported our industry and information technologies along with our middle class to these countries.
They have a growing thirst for energy, bush* and cheney* don't care where the money comes from, as long as it winds up in their pockets.