SUGARLAND IT JOBS

© Robbie Pugh - All Rights Reserved.

Oil is by far the most widely traded commodity in the world. It is also the most corrupt.

By way of example we need look no further than the events of the past two years. What with our TV screens filled with images of blazing oil pipes in Iraq, traffic jams in Shanghai and hurricane disasters in the US. A seemingly endless list of horrors endlessly regurgitated. All this with one goal in mind: to convince us all we face an oil crisis of biblical proportions.

1. OPEC warns they cannot keep up with demand. We see faceless "experts" wheeled in to pontificate on Chinaґs insatiable oil demands. They “fret” over gasoline and heating oil shortages, the failure to discover new oil fields and agonize over how our oil reserves will sink to dangerously low levels within twenty years.
2. Now, of course, the market is all in a lather over Iran and whether they will hold oil off the market. Oh, sure, as if they don`t need our money as much as we need their oil.
3. Inevitably, crude oil prices rocketed from $25 per barrel to a recent high of $72. At the time of writing the price stands at $66 which, the media breathlessly warns, represents merely a pause for breath before its run continues to $150 and gasoline to $5.30 per gallon.

Now before you rush out to replace your SUV with a battery driven car with the power of a hair dryer, you should know the real facts, the real story. Talk about being spoon-fed a plateful of old baloney! Let me expose the three popular myths (=lies):

MYTH #1 - Demand Heavily Outstripping Supply.

The monthly reports from the IEA (International Energy Agency), the bible for the trading pits, contradict this. Worldwide, inventories grew to near record levels, having climbed steadily since the invasion of Iraq. So, if demand exceeds supply how come we see inventories climbing? Consider the perversity of rising inventories AND rising oil prices.

MYTH #2 - China Voraciously Sucking-In Oil.

Yeah, right. The same IEA reports show that in 2004 China increased its imports by a fairly modest 900,000 barrels per day. Compare this with daily world consumption of 20 million barrels. In 2005, Chinaґs imports actually dropped! They not only consume less but they manage to sell the stuff to the US! But the market boys refuse to allow these facts get in the way of a good story!