No Shortage in Oil Supply: Speculators
Force Oil Prices Up
BY IBON Foundation
Oct. 26 2004
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Speculation, and not
the lack of oil supply, is pushing world oil prices to record highs.
There is actually
more than enough amount of crude oil to supply the global requirement of
around 80 million barrels per day. But crude oil prices, now at a new high
of $55.67 per barrel, continue to rise because of intense speculation in
the global market.
Political anxieties
in major crude oil producing countries like Iraq, plus the supposed lack
of spare capacity and seasonal increase in demand due to the winter season
all have raised the risk of tight supply and have attracted aggressive
speculators.
Speculators are able
to affect prices by speculating the future supply and demand situation,
since some analysts claim that this determines the price of oil.
Meanwhile oil giants,
with their commanding position in the global market, can manipulate the
oil supply-demand balance. And as prices continue to soar, speculators and
big oil companies amass billions of dollars in profits.
Tough times are truly
ahead for Filipinos especially since the deregulated environment does not
protect consumers from the wild oil price hikes in the world market.
Because of oil deregulation, all the Department of Energy can do is haggle
with oil companies to implement the hikes in local pump prices on a
staggered basis.
It is true that the
Philippine government cannot control the activities of the speculators and
the giant oil corporations. But government can intervene at least in the
local oil industry by regulating the activities of the oil companies.
We do not have to pay
for oil that is unreasonably high. At the minimum, government must control
pump prices and strictly regulate the local downstream oil industry to
protect Filipino consumers.
Bulatlat
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© 2004 Bulatlat
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