Oil for yet another time broke new records in global market. A barrel of black gold climbed to $117 on Saturday and is expected to rise further for a whole set of reasons.
Economic analysts and asset managers shy away from giving any forecasts about where the ascending order of crude prices will stop. What most agree is that prices will continue to rise in the foreseeable future. They say there is reason to believe that buyers in no small numbers would be willing to pay $150 per barrel in the not too distant future.
It is not very difficult to understand what parameters are pushing prices on the volatile international market where some of the developing economies are buying up all the oil on offer.
There is a strong consensus that the steep decline in the value of the US dollar is one primary reason. Decline in the US’ strategic oil reserves comes next, to be followed by the insatiable thirst for energy in China and India, just to name a few.
Last but not the least is the increasing violence and political unrest in the Middle East and regular disruptions in oil exporting countries like Nigeria.
Many experts believe the systemic rise in crude prices in the function mainly of the deepening economic crisis in America, thanks to Bush’s disastrous Iraq war policy that has so far cost Uncle Sam close to a trillion dollars.
The non-stop slide in the greenback compared to other major international currencies and reports about the decline in the US strategic oil reserves have caused serious concern among investors and sent shivers across global markets.
As if all this was not enough, the ongoing subprime mortgage crisis in America is seen as the icing on the cake!
Many economists including those at the IMF, World Bank, and in western capitals have portrayed an uncertain future of the world economy and say things will get much worse before they get any better.
The monetary and financial “policies“ of the Bush regime have been a large part of the problem and continue to disrupt the global economic order or whatever is left of it. These policies include cutting taxes for the rich, boosting military spending despite the failures and defeats of its foreign invasions and the mortgage crisis that have resulted in major international banks standing in the line to file for bankruptcy.
The US aside, many other countries too are suffering from the spread of the economic crisis. Key members of the Organization of the Petroleum Exporting Countries have also been hurt as a result of the weak greenback.
Instead of pausing for thought and weighing the alternatives for crisis control, the Bush camp and its neocon advisers continue to persist on their terrible and highly costly military venture in Iraq and Afghanistan. This is not to say that the White House has any illusions about how the military conflict will proceed five years after George Bush bombed his way into the two Muslim countries.
Washington seems not to see the reality after so much has been lost and pushed millions of more Americans below the poverty line.
The Bush-Cheney cabal is beating the drums of war in one of the world’s most strategic and oil-rich regions solely with the aim of protecting Israel and its “borders’.
America has also been accusing OPEC of disrupting the world oil market by refusing to open up the taps. The claim is at best nonsensical simply because OPEC members and other oil exporters have long been producing at full capacity despite technical constraints.
It is amply clear that although higher oil prices are filling the coffers of the exporting nations and helping them to spend more petrodollars on infrastructure and economic development, inflation and forex rate fluctuations are eating away the their earnings at rates unprecedented in recent memory.