Tuesday, May 18, 2004

Anti-Midas strikes again...

Oil Prices Surge; Gas Prices Hit Record
LONDON (AP) -- Oil prices surged to near $42 a barrel and the U.S. Energy Department said the country's average retail price of a gallon of gasoline had passed $2 for the first time.

Pressure is building on OPEC to dip into some of its spare production capacity to boost actual output - not just its target. Markets are stretched by unexpectedly strong demand and spooked by turmoil in Iraq and uncertainty elsewhere in the oil-rich Middle East.

The assassination Monday of the head of the Iraqi Governing Council underscored the political instability in that country, which has the second-largest proven crude reserves after Saudi Arabia. Izzadine Saleem was the second and highest-ranking member of Iraq's U.S.-appointed council to be assassinated.
Compare this news to coverage from the Drumbeat to War®:
A U.S.-led ouster of Iraqi President Saddam Hussein could open a bonanza for American oil companies long banished from Iraq, scuttling oil deals between Baghdad and Russia, France and other countries, and reshuffling world petroleum markets, according to industry officials and leaders of the Iraqi opposition.

Access to Iraqi oil and profits will depend on the nature and intentions of a new government. Whether Iraq remains a member of the Organization of Petroleum Exporting Countries, for example, or seeks an independent role, free of the OPEC cartel's quotas, will have an impact on oil prices and the flow of investments to competitors such as Russia, Venezuela and Angola.

While Russian oil companies such as Lukoil have a major financial interest in developing Iraqi fields, the low prices that could result from a flood of Iraqi oil into world markets could set back Russian government efforts to attract foreign investment in its untapped domestic fields.
This is yet another aspect of this failed excursion. Sadly, there were plenty of voices out there saying this very thing, but they were drowned out by this administration's "Bonham-esque" Drums of War solo.