Big oil speculators ensure that a barrel of oil crosses the $135 mark

On 22/5/2008 a barrel of oil briefly broke the $135 mark and prompted many analysts to forecast $200 for a barrel of crude by the end of the year. The high price of oil is despite the fact that more and more oil reserves are either being discovered or being improved to boost productivity. For instance during 2007, 250 million barrels of oil were found in Uganda, 8 billion barrels discovered in Brazil and technology improvement has meant that extraction of oil from Canada’s tar sands — deposits that could rival the Middle East—is commercially lucrative. Furthermore, many respectable institutions are predicting that the recession in the US and the high price of oil will dampen overall world demand for crude in 2008. These tell tale signs indicate that speculation is the main factor behind the price of crude. Big oil speculators are intentionally inflating the price of oil to strengthen the sagging value of the dollar. The fact that oil is traded in dollars is assisting the US to keep its economy afloat.

22/5/2008