Wednesday :: Mar 29, 2006

The Crude Truth

by pessimist

For a land with a free press, America sometimes seems like another place. China - a land which has had a tightly controlled media even before the Communists took over - seems to be taking on some of the reportage that the American media once covered.

What is to be made about a story like this?

Why does world oil price soar up?

Since the beginning of this century, especially since the US launched Afghanistan and Iraq wars, oil prices have always been increasing... 31 dollars per barrel in 2003 to 41 dollars in 2004 and then 56 dollars in 2005. Particularly, from the end of August last year to this January, the price was almost more than 70 dollars per barrel. The crude oil price is too high, the high period is too long!
The cost of [producing] crude oil is estimated at just 15 US dollars per barrel.
With the same amount [for] profit, then the price should be between 30 and 34 US dollars. But the oil price has been lingering above 60 US dollars per barrel. It's estimated that 70 percent of the oil price hike was caused by speculation.

When crude oil price goes up, oil producers definitely make more profit. No matter what happens, they don't want to see the oil price go down too fast. Last year, Exxon-Mobil, Shell and Total earned a net profit of 36 billion US dollars, 23 billion US dollars and 14.3 billion US dollars respectively. Exxon-Mobil renewed its world record of annual profit and the latter two broke their domestic records.

What would the Petrotariat - I mean, the White House, do if an American media source presented such information?

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