Gallery E
Crude Dependence
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That Suspicious Drop In The Price Of Oil

By James Donahue

As an unexpected holiday gift, travelers everywhere have been happily filling up their gas tanks with low priced fuel. Gas prices in some parts of the United States have dropped from around $4 to under $2 a gallon. But is anybody concerned about the reason for this sudden change?

There seems to be a surplus of crude oil on the market which usually signals a decision by OPEC to cut back on oil production, thus stabilizing prices. But this year during OPEC’s Nov. 27 meeting, members voted against a cutback. Why would they do this? They are worried about the Canadian shale oil project and other new found sources of oil that apparently threaten enough competition to drive the price of oil down.

A Reuters news analysis by Anatole Kaletsky suggested that the slump in oil prices might go even lower and last for months until one of two things happen. Either Saudi Arabia will re-establish OPEC’s monopoly power of the oil market, or the global oil market will move into a normal competitive condition established by world production.

To date, oil prices have dropped from about $100 to just over $50 a barrel. Kaletsky suggests that it may drop as low as $20 a barrel before things stabilize.

But Ellen Brown, in a news analysis published on The Web of Debt Blog, offers another twist to the politics behind the oil price slide.

Brown said it all "appears to be an act of geopolitical warfare against Russia" which currently rates the value of oil against the ruble, Russia’s currency. The Russian economy has literally tanked because of the drop in the value of oil.

Also, Brown noted, the oil price drop also is resulting in "trillions of dollars in oil derivative losses." This is strangely significant, she wrote, because of passage of a finance bill in Washington that repealed key portions of the Dodd-Frank Act that would have held big banks liable for derivative losses. In other words, the big banks are free to gamble with taxpayer dollars and when profits are lost, the government must again pick up the tab.

This is the same situation that brought about the big financial crash in 1998. And signs are strong that the same thing is about to happen all over again.

Senator Elizabeth Warren and U.S. Representative Maxine Waters led a battle to block the repeal. But their efforts failed because of tough lobbying by Jamie Dimon, CEO of JP Morgan Chase and President Barack Obama, Brown wrote.

The timing of this sneaky piece of legislation is, indeed, suspicious. Not only is the United States using financial and oil price leverage against Russia, for whatever political reasons, but legislators were careful to set up our own government coffers to protect more risky banking practices.

It is an organized rip-off of everybody at the grass roots level.

What is happening also is an attack on the new Canadian oil shale boom, on the new U.S. effort to normalize relations with Cuba where rich new offshore oil deposits have been discovered, and worst-of-all, on the environment.

It means that the push for alternative energy sources may be eased, the world could fall back into a heavy dependence upon gas and oil fuels, and carbon pollution of our skies will intensify. It means climate change will become more severe. It means that the human race is being bamboozled into submission and potential extinction once again.

All for big oil and big money.

Can anybody find a way to stop the insanity?