Speculators, Cartels and Myths of Scarcity: How War Pushes up the Price of Oil

Oil Wars/Wikimedia image

Dean Henderson
Global Research

Last week, as if to justify his Libyan crusade, President Obama echoed the prevailing “peak oil” myth, stating that “we must accept the new reality that from here on out, demand for oil will always exceed supply”.  It was music to the ears of the Rockefeller/Rothschild energy cartel and tax-dodger oil traders in Zug, Switzerland alike.  Both know full well that oil companies pay around $18/barrel to get crude out of the ground.

Big Oil rings up its usual quarterly record profit, speculators led by Goldman Sachs and Morgan Stanley tack on another $50/barrel and people get gouged at the gas pump.  Governments “tighten their belts”, economies contract and the myth of scarcity (root word: scare) encourages a race to the bottom for the global masses, alongside an historical concentration of power and wealth by the well-fed and fueled global elite.

A day after Obama’s endorsement of concentrated corporate power and casino capitalism, the US Department of Energy reported that the main US oil stage depot at Cushing, Oklahoma was holding 41.9 million barrels of crude oil, very near its capacity of 44 million barrels.  In other words, the US is awash in crude oil.
Here in South Dakota, the USDA announced that farmers plan to plant an additional 850,000 acres of corn- the most since 1931.  According to a March 10 bulletin from USDA, Brazil’s corn crop is 2 million tons higher than last year.  Yet corn futures on the Chicago Mercantile Exchange trade at record prices.


According to the same USDA report, “U.S. wheat ending stocks for 2010/11 are projected higher this month on reduced export prospects. Projected exports are lowered 25 million bushels with increased world supplies of high quality wheat, particularly in Australia, and a slower-than-expected pace of U.S. shipments heading into the final quarter of the wheat marketing year.”  Yet wheat futures hover near record highs.

There is nothing alarming in the report about supplies of beef, poultry, eggs, milk, sugar or rice either.  Yet food prices continue to skyrocket.

The global elite know that both food and energy are paramount to life. Control over these two most basic needs means control over people.

After the 2008 acquisitions of Swift, Smithfield and National Beef Packers by Brazilian meat-packer JBS, there are three conglomerates that control over 80% of beef-packing in the US – Tyson, Cargill and JBS.  These same companies control most of the burgeoning cattle feedlot industry centered in SW Kansas and SE Colorado.  They also dominate the pork, chicken and turkey industries.  Cargill is the largest grain processor on the planet, handling a full one-half of global grain supplies.
  
Four giant companies are making a play to own not just all the oil, but virtually all energy sources on the planet.  In my book, Big Oil & Their Bankers…I dub them the Four Horsemen – Royal Dutch/Shell, Exxon Mobil, Chevron Texaco and BP Amoco.
  
These companies control crude oil from the Saudi well-head to the American gas pump and profit from every step of processing, shipping and marketing in between.  While reactionary Republicans blame environmentalists for the lack of US oil production, it was these oil giants who capped permitted wells in Texas and Louisiana and moved production to the Middle East – where Bangladeshi, Filipino and Yemeni workers are paid $1/day to work the oil rigs.
  
Royal Dutch/Shell and Exxon Mobil are the heaviest and most vertically integrated of the Four Horsemen. These behemoths have led the charge towards horizontal integration within the energy industry, investing heavily in natural gas, coal and uranium resources.

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Garden As If Your Life Depended On It, Because It Does

There are at least five reasons why more of us should take up the spade, make some compost, and start gardening with a vengeance.

Garden hen/Wikimedia Commons image

Ellen LaConte
AlterNet

Spring has sprung -- at least south of the northern tier of states where snow still has a ban on it -- and the grass has 'riz. And so has the price of most foods, which is particularly devastating just now when so many Americans are unemployed, underemployed, retired or retiring, on declining or fixed incomes and are having to choose between paying their mortgages, credit card bills, car payments, and medical and utility bills and eating enough and healthily. Many are eating more fast food, prepared foods, junk food -- all of which are also becoming more expensive -- or less food.

In some American towns, and not just impoverished backwaters, as many as 30 percent of residents can't afford to feed themselves and their families sufficiently, let alone nutritiously. Here in the Piedmont Triad of North Carolina where I live it's 25 percent. Across the country one out of six of the elderly suffers from malnutrition and hunger. And the number of children served one or two of their heartiest, healthiest meals by their schools grows annually as the number of them living at poverty levels tops 20 percent. Thirty-seven million Americans rely on food banks that now routinely sport half-empty shelves and report near-empty bank accounts. And this is a prosperous nation!
In some cases this round of price hikes on everything from cereal and steak to fresh veggies and bread -- and even the flour that can usually be bought cheaply to make it -- will be temporary. But over the long term the systems that have provided most Americans with a diversity, quantity and quality of foods envied by the rest of the world are not going to be as reliable as they were.

What's for Supper Down the Road?

As they move through the next few decades Americans can expect:

• The price of conventionally produced food to rise and not come down again;
• Prices to rollercoaster so that budgeting is unpredictable;
• Some foods to become very expensive compared to what we're used to;
• And other foods, beginning with some of the multiple versions of the same thing made by the same company to garner a bigger market share and more shelf space, to gradually become unavailable.

Tremors in food supply chains and pricing will make gardening look like a lot more than a hobby, a seasonal workout, a practical way to fill your pantry with your summer favorites, or a physically, spiritually and mentally healing activity, or all four. Gardening and small-scale and collective farming, especially of staple crops and the ones that could stave off malnutrition, could become as important as bringing home the bacon, both the piggy and the dollar kind. Why?

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Oil rises sharply as West continues Libya assault

Oil rose sharply on Monday after continued air strikes on Colonel Gaddafi's military sites in Libya increased fears of a supply disruption.

AFP image

Garry White
Telegraph

Brent crude for May delivery leapt $2.21 to $116.14 by the afternoon as Gadaffi vowed to repel attacks from UN-mandated nations using missiles and warplanes against military installations.

The Libyan leader responded by saying: “We will not leave our oil to America or France or Britain or the enemy Christian states. We will fight for every inch of our land and liberate every inch of it.”

This suggested Libyan forces may sabotage crude installations, and some traders worry a cornered Gaddafi could lash out in a last stand that disrupts regional tanker shipments.

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World energy crunch as nuclear and oil both go wrong

The existential crisis for the world's nuclear industry could hardly have come at a worse moment. The epicentre of the world's oil supply is disturbingly close to its own systemic crisis as the Gulf erupts in conflict.

Anthony Freda Illustration

Ambrose Evans-Pritchard
Telegraph

Libya's civil war has cut global crude supply by 1.1m barrels per day (bpd), eroding Opec's spare capacity to a wafer-thin margin of 2m bpd, if Goldman Sachs is correct.

Now events in the Gulf have turned dangerous after Saudi Arabia sent troops into Bahrain to help the Sunni monarchy crush largely Shi'ite dissent, risking a showdown with Iran.

Russia's finance minister Alexei Kudrin warned on Wednesday that the confluence of events in Japan and the Mid-East could push oil to $200 a barrel in a "short-lived" spike, which would snuff out global recovery.

While there has been no loss of oil output in the Gulf so far, the violent crackdown in Manama on Wednesday left four people dead and risks inflaming the volatile geopolitics of the region. The rout of protesters encamped at the Pearl roundabout had echoes of China's Tiananmen massacre.

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Wholesale prices rise 1.6 pct. due to biggest jump in food costs in more than 36 years

Wikimedia Commons image

Yahoo/AP

WASHINGTON (AP) -- Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame.

The Labor Department said Wednesday that the Producer Price Index rose a seasonally adjusted 1.6 percent in February -- double the 0.8 percent rise in the previous month. Outside of food and energy costs, the core index ticked up 0.2 percent, less than January's 0.5 percent rise.

Food prices soared 3.9 percent last month, the biggest gain since November 1974. Most of that increase was due to a sharp rise in vegetable costs, which increased nearly 50 percent. That was the most in almost a year. Meat and dairy products also rose.

Energy prices rose 3.3 percent last month, led by a 3.7 percent increase in gasoline costs.

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RELATED ARTICLES:
5 Easy Ways to Prepare for Massive Food Inflation
7 Reasons Food Shortages will Become a Global Crisis

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US welcomes Arab League backing of no-fly zone

Arab League Secretary General Amr Mussa
© AFP Aris Messinis

AFP

WASHINGTON (AFP) - The United States welcomed Arab League support for a no-fly zone over Libya on Saturday, saying it signaled "unified" international pressure on Moamer Kadhafi's regime to halt the violence.

It stressed it would maintain its posture of support for the Libyan opposition, and that Washington was preparing for "all contingencies" in the North African nation where rebels have been battling regime forces for weeks.

"We welcome this important step by the Arab League, which strengthens the international pressure on Kadhafi and support for the Libyan people," White House spokesman Jay Carney said in a statement.

"The international community is unified in sending a clear message that the violence in Libya must stop, and that the Kadhafi regime must be held accountable."

After crisis talks in Cairo the Arab League urged the United Nations to slap a no-fly zone on Libya and said Kadhafi's regime had "lost legitimacy," in a boost for rebels fighting to unseat the strongman. Washington joined Britain in welcoming the 22-member League's support.


US President Barack Obama warned on Friday that the world is "tightening the noose" on Kadhafi, but admitted he is concerned the Libyan strongman's forces could thwart rebels battling to oust him.

"The United States will continue to advance our efforts to pressure Kadhafi, to support the Libyan opposition, and to prepare for all contingencies, in close coordination with our international partners," Carney said in his statement.

US posture on a no-fly zone over Libya has been far from unanimous.

Defense Secretary Robert Gates said Saturday that the US military and other allies could impose such a zone but it remains unclear if it would be a "wise" move.

"This is not a question of whether we or our allies can do this. We can do it," Gates told reporters aboard his plane after a visit to Bahrain.

"The question is whether it's a wise thing to do and that's the discussion that's going on at a political level," he said.



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