[FoRK] The Economist: US Foreign Policy, Terrorism, and Spot Oil

Russell Turpin deafbox at hotmail.com
Fri May 21 05:25:47 PDT 2004


Jeff Bone:
>The Economist: [1] Those who watch the oil market reckon that this (the 
>terrorism premium) is currently worth between $4 and $8 a barrel. ..

I've also read analysis that blames speculators for the
high price.

Frankly, I don't get either claim. Speculators might
drive up future prices. But unless there are speculators
with big tanks in their backyard taking delivery of oil,
I don't see how they can affect spot prices. These
are pretty much a matter of supply and demand. Or
so it seems to me.

Now obviously, the war has affected supply. If Iraq
ever starts pumping 5 million bbls/day, oil might dip.

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