Redstate

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Unseasonal temperatures in the Northeast US(GLOBAL WARMING must be to blame, not natural fluctuations as in past years)have again driven oil prices downward as the government reported on inventories.

NEW YORK (AP) -- Oil prices fell Wednesday after the government reported swelling inventories of gasoline, heating oil and diesel fuel.

Light, sweet crude for February delivery dropped $1.46 to $54.18 a barrel on the New York Mercantile Exchange, after sinking to $53.89 in earlier trading. The contract touched $53.88 on Tuesday _ a level not seen since June 13, 2005.

Oil prices have fallen by nearly a third since peaking at $78.40 last July and are down 9 percent so far this year.

Some time ago, I read that any price under $60 a barrel for oil was a disaster for Iran as according to a report by US National Academy of Sciences, Teheran is dependant on oil revenue for 70% of it's operating revenue. With Iran's oil exports declining 10% annually due to lack of investment in it's infrastructure, any decline in the price of a barrel is a blow.

Although OPEC decided to cut ouput in Oct by 1.2 million barrels daily to shore up prices, there are two members who noticably looked the other way, Iran and Venezuela.

Iran is pumping at the same levels, 3.83 million barrels per day(bpd), while Venezuela has actually increased production by 20,000 bpd.

OPEC has another "cut" slated for Feb of another 500,000 barrels but since OPEC in December alone cheated by pumping 700,000 bpd above it’s agreed upon quotas it's unclear what another cut of that size is supposed to do.

Another impact on prices is that in the last quarter Non-OPEC production also rose to 51.7 bpd million barrels, or 3% higher than a year earlier.

With Hugo, Bush is the Devil, Chavez freaking out down south and trying to seize more power, Mahmoud, Mini Me, Ahmadinejad now threatening to stop the flow of oil through the Strait of Hormuz, through which most middle eastern oil must pass through. I'm getting a sense of desperation especially now that Bush has pushed on the international banking system through various means to cut off Iran's access to foreign banks, BAM!!, POW!!!, WHAP!!!, much as it did with North Korea.

Now with the possibility that oil is beginning to head to a more rational price, combined with recent disclosures that US companies will be allowed to help Iraq begin to re-establish it's own oil output, the mismanagement of Chavez and Iran will hopefully quiet some of the worlds more obvious tensions.