The oil price has been behaving strangely since the middle of 2006. While most commodity prices have been rising, or at worst drifting sideways, oil has been bucking the trend and falling. The price of New York crude is now nearly back to $50 compared to a high of $80, i.e. down 38 per cent. This in the midst of a global economic boom, and with the mainstream investment community now talking seriously about Peak Oil in the foreseeable future.We know - or ought to know - that Dubya and his cronies love to play complicated global power games. It's all part of the semi-paranoid neocon mission to change the world. (Itself a manic backlash response to the new il-liberal cultural hegemony. I.e. a last ditch attempt to save the planet for 'conservatism' - except that the thing now being sold under the Republican banner barely deserves that name.)
So what I'd like to know is, what are they up to? Just because they received a vote of no confidence in the recent midterm elections doesn't mean they've given up. Missionaries don't give up that easily.
There is a complex scenario brewing in the Middle East:
1) Iraq on the verge of total chaos.
2) The West on the verge of economic war with Iran.
3) Israel getting (justifiably?) paranoid about a global war on Jews.
4) Other countries worried about Iran and Israel.
5) The Saudis probably still in cahoots with the US, but possibly getting less so.
On top of that, you have Russia desperate to raise revenue, in order to finance its infrastructure expansion, before the commodity boom ends. Hence pumping oil like there's no tomorrow.
We know that Bush is capable of manipulating the oil price through domestic fiddling. He promised at one point he would do so, and ahead of the midterms it was generally accepted that fiddling (e.g. by hints to people like Exxon to keep the domestic pumps at full output) was happening, as a way of keeping the price down and sentiment towards the Republicans positive. The question is, is Dubya also fiddling the supply from the Middle East, through deals with the Saudis or other governments?
Or are the Middle East countries themselves doing some politically inspired fiddling? E.g. making hay while the sun shines, say before there is some crisis which puts the kibosh on normal oil export patterns?
For some background on this issue, an article by Gary Dorsch at safehaven.com is worth checking out.