Big oil will profit immensely from the turmoil in Libya. It already is. Even though there hasn’t been a moment’s disruption or even a sign that there will be, traders are driving up prices and big oil, which already has years of supply laid aside, will now sell their existing stocks at greatly inflated prices.
Oil prices charged to fresh 2-1/2 year highs on Monday as traders reacted to increasing violence in major producer Libya, which fed investor fears about rising inflation and unsettled other markets.
Here’s how it works. You go into your store to buy a loaf of bread. All of a sudden a kid runs up and raises the prices 25% on that loaf because the manager has heard that wheat prices will be higher at the next harvest. You go to the manager and say ‘what the devil are you doing????!!!!! The loaf I’m buying was produced ages ago from wheat purchased months back. Why raise the price on it?’ ‘Well’, says he, ‘because prices may go up if production is influenced by current events’…
That’s what the oil companies, and the gas stations, do. I promise you, even though the gas in the tanks at the stations will have been there for a while, the next time you fill up you’ll pay a lot more because of the fear mongers and the oil companies will be so gleeful that they will scarcely be able to contain themselves.
And it’s all because our moronic policy makers haven’t freed us of our masters in oil.