I’ve always been an advocate of the free market, but at some point the speculative nature of this current oil boom will burn itself out, and we will all be holding the bag.
Since the Israeli-Lebanon War began, oil has climbed from around $71 to $78 in about a week. At the same time the Dow dropped nearly 400 points. Why is this?
There is no oil in Israel. Nor in Lebanon. There is oil in Iran, but with our troops and more importantly air power in Iraq, there is no way that Iran can officially get involved in the conflict.
Sure, Iran could shut down the Straits of Hormuz, but the last time Iran did that we sunk a good chunk of the Iranian fleet in a One Day battle.
This time it may take a few days.
So what can account for this push to $80?
I don’t mean to sound like a raving Leftist, but either the oil traders are ignorant of where the oil actually is in the world – or they are simply greedy.