Contrary to reports yesterday, OPEC will not consider an oil production boost this weekend, and won't even discuss it, according to the Los Angeles Times, quoting Saudi Arabia's oil minister. Everyone seemed to think a supply increase was in order in September, when OPEC agreed only to a "token" boost; since then, the world economy has been on edge, as oil prices break record after record.
As we've said before, all the peak oil analysts' eyes are on the Saudis, because they have the largest known reserves, and what signs sneak out of the secretive regime can be read to indicate they're exhausting those supplies. In other words, anytime they don't boost supply, it leads more to believe they can't, because they're tapped out.
As if to stave off that kind of peak oil speculation, the head of Exxon-Mobil yesterday pinned the price run-up on everything but a shortage underground, according to the Toronto Star. The cause, in his view: primarily nations that want to be paid well when international companies pump their oil. He calls it "resource nationalism." (Maybe he should come up with a more demonizing name, because that doesn't sound all that unfair. Remember that pity is in order for Exxon, the world's largest oil company, because its 2007 profits are down from record 2006 levels; it made only $9.4 billion in the last quarter.)
What does it mean for consumers? You guessed it. Higher prices.
The cost of gasoline is already up about 30 cents in the past few weeks, and it may go up another 20 cents to account for the higher price of crude, according to USA Today. And, as the cost of oil and gas go, so goes much else, from food to holiday gifts. And, if they cost too much, the American economy starts to slide ever closer to recession.
Which is why determining the true cause of the oil spike matters.
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