...rather, the price of oil is the product of a "common understanding," says one Abdalla Salem el-Badri, the secretary-general of OPEC. Here's the quote from the AP story, so it's clear I'm not paraphrasing or spinning:
"'Oil prices, there is a common understanding that has nothing to do with supply and demand,' el-Badri said on the sidelines of an energy conference in Rome."
This little tidbit comes to us in a story about the national average gas price hitting $3.50!
It's interesting that the head of OPEC tells us that the price of oil has nothing to do with supply and demand, yet this AP article attempts to justify the new record oil price of $117.83 with the following factoids:
-"Militancy and lawlessness has [sic] grown in recent years in Nigeria's south,
and attacks on oil infrastructure have become common."
-"Nigeria is a major supplier to the United States. Attacks there in the past two years have cut nearly a quarter of the African country's oil output."
-"Crude oil also rose Monday after the 150,000-ton tanker Takayama was attacked off the coast of Yemen as it headed for Saudi Arabia."
-"In Mexico, oil production slipped 7.8 percent in the first quarter to 2.91 million barrels a day as output at the country's traditional oil fields wanes, state oil company
Petroleos Mexicanos said."
-"In Scotland, workers at Ineos PLC's 196,000-barrel-a-day Grangemouth refinery and petrochemical plant have threatened to strike for 48 hours from April 27 over changes to an employee pension plan."
Hmmm...all of those sound like reasonable excuses for the price of oil to go up. However, the head of OPEC, of which Nigeria (which, as you'll recall is a "major supplier" to the U.S.) is a member, just told us that supply and demand have nothing to do with the price of oil.
What Is This "Common Understanding?"
If you're like me, you probably wonder what "common understanding" the head of OPEC is talking about. Also if you're like me, you really already know what the understanding is but search for just the right way to accurately express it. Well, search no more, for here it is, from the Boston Herald:
"[Peter] Beutel [a Cameron Hanover analyst] estimated that the 25-cent gas
increase over the past two weeks takes about $100 million out of American
consumers’ pockets each day, funneling money away from other purchases."
There it is, the "common understanding" among OPEC members that truly determines the price of oil--$1,400,000,000 dollars transferred to the already obscenely wealthy. That's $1.4 BILLION sucked out of our pockets in just 2 weeks! And that's only an "estimate!" It could be even higher! Who doesn't "understand" that? If you could make an extra $1.4 billion in 2 weeks without the hassles of providing better products, better services, or any of that jazz, wouldn't you do that? Of course you would! Now you "understand!"
OPEC Is A Cartel...
...and by their very definition, cartels are formed to regulate prices:
"car·tel Audio Help /kɑrˈtɛl/ Pronunciation Key - Show Spelled Pronunciation[kahr-tel] Pronunciation Key - Show IPA Pronunciation
–noun 1. an international syndicate, combine, or trust formed esp. to regulate prices and output in some field of business."
Or better yet, from the same link:
"car·tel Audio Help (kär-těl') Pronunciation Key
A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members."
Just one more--they get more damningly accurate as you scroll down the page:
a consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service; "they set up the trust in the hope of gaining a monopoly" [syn: trust]"
Great cartel article here. Gotta go night-night--I think the point is abundantly clear, i.e., that we're being raped economically and it's on purpose, it's by design and the people who we elect to supposedly look after our interests are just letting it all happen.