From Mr C. Grech

I wish to point out to your readers something else about the real reason for the oil hike in recent months. George Soros, a multi-billionaire said that the price of oil is like a bubble. Is this person and his like responsible for this price surge? Bush had criticised the Democrats recently for not opening up to a new oil law, and now is to relax a moratorium on oil supply that his own father had pushed as legislation. Although the supply-side economics is of great importance, this is not the case, and is the usual excuse made by politicians in the media.

Finally, a good clue is provided by Reuters in Moscow: “Russian Prime Minister Vladimir Putin has called on investors in the liberalizing power sector not to stuff their ‘stomachs’ with quick profits and pledged harsh treatment for those not respecting national and social interests.”

As Mike Whitney wrote in his article “The Great Oil Swindle – How Much Did The Fed Really Know?’ ‘For months we’ve been told that the soaring price of oil has been the result of Peak Oil, fighting in Iraq, attacks on oil facilities in Nigeria, labour problems in Norway, and (the all-time favourite) growth in China. It’s all baloney. There are three things that are driving up the price of oil: the falling dollar, speculation and buying on margin.”

Who are these investors? They are brokers or futures financial companies that can buy or better still “reserve” some oil supplies of a partial oil field at a fixed price in advance. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only six per cent of the value of the contract. It is estimated that pressures from these companies are lining their profits and, when forming a cartel, can control a good portion of world production. Therefore, opening up new oil wells may ease the problem, but certainly not the mitigating factor in this case. The increase in demand by Chinese importers is equal to the demand from index speculators. Now you work out the maths.

Therefore, as politicians are supposed to take care of their own citizens’ welfare, this criminal behaviour from these financial companies must be stopped. As oil prices increase, the brunt of the increases is borne by ordinary citizens, not politicians, who use cars and run them on our taxes. Therefore, the issue on the increase of oil prices is: Are politicians (of the G8 at least) going to force these futures traders into submission, or is it business as usual. Something should be done to make these filthy-rich companies trade in a decent manner, and not by collusive means strong enough to create the price they want!

Christopher Grech

TAL-IBRAG