$200 a barrel of oil?
Gee - looks like it. Via the NYT
ALGIERS (Reuters) - OPEC President Chakib Khelil does not rule out oil prices reaching $200 a barrel, even though supply is adequate, because the market is driven by the dollar’s slide, Algerian government newspaper El Moudjahid reported on Monday.
“Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar,” El Moudjahid reported.
[snip]
He added that: “If this (the dollar) strengthens by 10 percent, it is probable that (oil) prices will fall by 40 percent.”
If the U.S. economic situation improved from now to the end of the year “that would help the market to stabilize.”
Gee - how do you lower the price of oil? Stabilize the US dollar. stop it’s decline. Give people a reason to bet on the American economy by drawing their dollars here. How? Interest rates - higher interest rates than we have now will draw dollars. Oh- a more robust economy would help too.
I would be remiss if I didn’t add a small rant about gax taxes. There is discussion about lowering the tax on gas or having a Gas Tax holidays (our local clothing tax holiday is also included here). These amount to stunts and are simple diversions. We deprive the government the funds it needs to function. (funding the government and spending that money wisely are not mutually exclusive). Check out NYT columnist Krugman’s take on “starving the beast” (written 3 years ago).
Want to help the economy - take that revenue and plow it into much needed infrastructure. Invest the Tax dollars wisely. Want to lower the tax burden on individuals? Broaden the tax base (subsidies anyone?)
Our government needs to take a longer view of the impact of its decisions, not a shorter view.
[...] of hot air. Gas Tax Holidays are all the rage. It doesn’t matter that oil could go to $200 a barrel. Joe Robach, Hillary Clinton and John McSame have an election to try and win in November and they [...]
[...] Then there is simply NO MENTION of the affect the low dollar has on gas prices. I’ve been be discussing it for a while - You can read this International Herald Tribune article or this post. [...]