Oil, Investors, Russia & Iraq

What is the deal with oil investors, events in Iraq, and the cost of a barrel of oil? It is likely that the price of a barrel of oil will top $50 in by the weekend or early next week..

Consider this: U.S. forces continue to stomp all over the terrorist al-Sadr's henchmen in Najaf after the terrorists continued shelling Iraqi citizens and Iraqi and U.S. military positions. al-Sadr's acceptance of the Iraqi government terms may have been some kind of ruse, and the fighting continues. Civilians continue to die faster on the battlefields than the combatants.

Just a few hours ago it was announced that members of al-Sadr's militia broke into an oil company's compound in Basra and torched several buildings. The price of oil jumped immediately. Why?

Iraq's oil has been embargoed for years. The addition or subtraction of ANY Iraqi oil (whether it be 900,000 barrels a day, or 1.8 million barrels a day or 40,000 barrels a day) should LOWER the price of crude oil, not raise it.

If you ask me, this spike in oil prices is a conspiracy between the oil companies, the oil sheiks, and investors who all stand to profit from high oil prices. Think about it: the oil companies decide to cut back their estimates of how much oil is left in their oil fields. This new estimate allows investors to spike the price of crude oil. The Saudis and OPEC insist they need $28-$34 a barrel to make a decent profit and raise their production levels to keep the supply up and the demand down. But they won't turn away the extra billions of dollars that $48.75 a barrel brings in. Why should they?

In the meantime, the investors are keeping watch on every little thing that will allow them to raise the price even further. Attacks on oil terminals in Iraq; the possible (but HIGHLY unlikely) bankruptcy of a Russian oil firm; the "estimated" amounts of oil left in the oil fields, the amount of fuel coming in from Venezuela and other nations currently undergoing civil unrest that contribute to the oil supply, the phases of the moon and everything else that suggests that the sky is falling.

We do have to allow for unexpected growth in China and in the Third World that contributes to more gas being purchased and consumed by those nations, which leaves less for other nations that need the oil. However, even with that, the price of gas should be around $35 a barrel.

If anyone has any ideas for alternative fuels, now is the time to speak up!