24/7 Wall St. bullshit

Courtesy of one “Douglas A. McIntyre”, a little piece of absolute hogjaw twaddle:

The prevailing wisdom is that oil prices will move down. They have already dropped from over $78 to $72, and most observers think that is only the beginning. Troubled financial markets and the potential of a slowing global economy should being demand down.

Don’t tell the president of Venezuela, nut job Hugo Chavez any of that. He wants the world to believe that he can control the price of crude, which is only partially true. According to Reuters: “I’ve always said that oil prices are headed straight to $100 per barrel,” Chavez said during a televised speech. His argument is simple. Supplies are dwindling and consumption is still going up.

Meanwhile, speaking of simple arguments: This guy is about as simple as they come. He claims that the drop from $78 to $72 a barrel for oil is a sign of a trend? Pfffft. One day’s or week’s variation in the market does not a trend make, Mr. MacIntyre. “The prevailing wisdom” is neither prevailing, nor is it wisdom; it is wishful thinking all the way. This drop is short-term, and should therefore not be seen as indicative.

Nor is there any validity to the idea that “the potential of a slowing global economy should bring demand down.” Oil is one of those things that keep right on selling whether the economy is up or down; the demand remains constant. It is not (yet!) a luxury item. People commute to and from work every day; plastics production goes on; oil is integral to far too many processes to be dispensed with altogether. But the oil supply is dwindling, and that is a fact. As it dwindles, its price will rise accordingly. One need not be an economist to understand that. But if you want an economist’s view, here is a British government study to prove it.

Of course, let’s not forget that Mr. MacIntyre is misquoting Chavez, who is not setting those rising prices (he has no control over that; he is not a commodities trader but a president, hello!) Here’s what was actually said:

World oil prices are headed for $100 per barrel, Venezuelan President Hugo Chavez predicted on Saturday, and said he will cut supplies to the United States if the U.S. government “attacks” the South American nation again.

“I’ve always said that oil prices are headed straight to $100 per barrel,” he said during a televised speech. “We should prepare ourselves for those prices of one hundred dollars.”

Chavez said high oil prices were the sign of a “global crisis” in energy caused by voracious consumption that has vastly reduced available oil reserves.

Chavez has accused the United States of plotting a bungled coup that ousted him for two days in 2002, though Washington denies the accusations, and has repeatedly made conditional threats to cut off oil sales to the United States that historically account for 12 to 15 percent of U.S. imports.

“No one should think that we’re going to stop sending oil to the United States, no — unless they attack us again,” Chavez said during a speech to leaders of Caribbean nations meeting in Caracas for an energy summit.

“If they attack us again like they did in April of 2002 … there will be no oil.”

I guess this is what prompted the misquotation: Chavez is watching the long-term trend and making a plausible prediction based on what he has seen. Let’s not forget that since he came to power in 1998, Chavez has seen the price of oil skyrocket from less than $10 US a barrel to its current all-time high. And, as president of an oil-producing country, he knows full well that as the more easily available reserves of light sweet crude in other countries peter out, his own country’s heavy crude will replace them. And since that heavier crude is harder to extract and costlier to refine, of course the price will go up. One need not be an oil industry expert to grasp those basic facts!

Nor does one need a crystal ball to see what the implications are for the US if they try to stage another coup for oil. Chavez is right about that, too: the first one was indeed an oil grab. It came right when there was talk in Venezuela about using oil revenues to serve the people, rather than privatize PDVSA and let Big Foreign Oil take over. And of course, right after the two coups of ’02 were reversed, that oil money did indeed go to the social-welfare missions, where to this day it is doing good work.

Some “nut job” that Chavez is, eh? I’d call him crazy like a fox.

I sure pity anyone who relies on this site for its vaunted “insightful analysis and commentary”; I see no such thing. Only ad hominem bullshit (“nut job”–how insightful and analytical!) from a know-nothing who fancies himself a pundit-in-waiting, and is too cowardly to acknowledge any facts which contradict him–or let anyone else respond with same.

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5 Responses to 24/7 Wall St. bullshit

  1. Slave Revolt says:

    Bina, what I see this hype as part of the discourse/negotiation/strategy.
    Chavez talks the markets up–basically saying that the oil nations deserve more money/sacrifice from the developed nations.
    Of course, this oil nationalism has every capitalist and his lackie all peturbed–they wouldn’t be good lackies if they didn’t hate Chavez and make a fuss about Chavez’ strategies to pry Latin America and the Carribean area away from the US.
    The BBC last night was trying to associate the Venezuelan military with greater amounts of cocaine coming to England and Europe. Totally unsubstantiated assertions, no reference to any facts. Just a slimey smear.
    The Venezuela situation gives one a chance to see the brazen and craven bootlickers for capitalist oligarchy and class oppression for what and who they are.

  2. Bina says:

    And of course, they’re all still hoping to break OPEC’s spine again and drive prices unnaturally low as they were when Chavez first came to power.
    No chance! The oil companies are as complicit as anyone in keeping those prices high now. Even they can only drop so far.
    And remember, even if prices drop drastically, they still have plenty of room to play with. The original calculation to make Venezuelan oil profitable and the missions possible was a mere $22-28 per barrel price band. Even if the price of oil were to sink to that level tomorrow (unlikely!), the Bolivarian projects are still safe–and paid for in full, with no resort to the World Bank OR the IMF.

  3. Slave Revolt says:

    Given the profligate nature of energy consumption here in the US, I am cheering the price up to $100.00 per barrel.
    Maybe then there will be a little bit of introspection and movement toward more fuel efficent technologies.
    Three bucks a gallon certainly didn’t do the trick.

  4. Anthony Kennerson says:

    And considering that we now have a Category 5 hurricane (Dean) about to blast through the Yucatan Penisula and strike more or less directly towards one of Mexico’s most productive oil fields, I don’t think that oil prices will be going anywhere downward any time soon.
    This is just more smack from the oil-igarchy to justify toppling Chavez as a threat to their power….if that doesn’t work, like I think it won’t, the next step is either another coup or “Contra II”, ala Nicaugua of the 80s.
    As if debacle in Iran and Iraq and Syria and Pakistan wouldn’t be enough…

  5. Bina says:

    Anthony, great to see you back–and excellent points all.
    You’re right, there ARE coup plans underway. The RCTV noise is one part of the equation; that’s still raging in some quarters, notwithstanding that RCTV is still available via cable and satellite, and is even illicitly billing itself as now “international” though its content and production are all Venezuelan and not a bit international. As Mark Weisbrot of CEPR has pointed out, there is NO lack of free speech in Venezuela; it’s just that one coup-mongering channel’s licence ran out and was not renewed for numerous violations that would certainly never pass muster if that station were FOX and its target were Bush.
    There’s also the inconvenient fact that the State Dept. has participated in “soft” coups before. And one of the ways it does so is to try to go for the appearance of popular disapproval of a leader they want to shuffle off. That may have worked in Ukraine and Serbia, because both had really unpopular, autocratic leaders–but Venezuela is totally different. Chavez is both popular and democratic. So this effort is totally unconvincing. (It doesn’t help that the “non-violent” anti-Chavez groups receiving US funding are actually violent and terroristic in rhetoric and actions, either.)
    Another of the ways it does that is to use human rights groups as a front. Reporters Without Borders has received State Dept. funding. Can we trust them now? Not that we ever could; it turns out that the organization is biased towards media owners and doesn’t give a shit for reporters.
    I wouldn’t even put it past Human Rights Watch to have received funding from a shady source connected to the State Dept.; their most recent reports from Venezuela are all super-duper double-looper crazy-loco like the opposition. And about as convincing, too.
    I doubt very much that this will stop the State Dept. as it gears up for the next round, though. John Perkins tells us that things tend to go in a certain order: First the economic hitmen, and if they fail, then the CIA jackals, and if THEY fail, then war. They’ve had two strikes out of three so far.

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