|Oil Up As the US-led Coalition of Oil-Dependent Countries Strike Libya, Japan Disaster|
|Wednesday, 23 March 2011 14:21|
Hamsayeh.Net - Crude prices jumped up again after a short relapse following the disaster in Japan. Prices are moving up toward a more natural median, which according to experts should extend above $150 per barrel for a foreseeable future.
Crude prices jumped up again after a short relapse following the disaster in Japan. Prices are moving up toward a more natural median, which according to experts would be above $150 per barrel for a foreseeable future.
Ghaddafi’s forces are engaged in full battles across Libya and many people fear that they could inflict huge damages to Libya’s existing oil infrastructure, if feel cornered. That should eliminate very important supplies from Libya out of the global markets for years to come.
During yesterday’s trading oil went up 1.6 percent to near an average of $110 a barrel. A gallon of gasoline today hovers around $4 heading up towards $5 sometime during next summer.
This picture posted on the internet shows US President Brack Obama
bowing to King Abdullah of Saudi Arabia during a G20 summit
Also faced with massive energy cuts from its crippled nuclear plants, Japan is planning major oil purchases, which could boost prices even further. ‘Japanese oil demand took a hit initially but is going to rebound in spades, the situation won’t be resolved soon and will probably get worse before it gets better,’ explained Bill O’Grady, an oil analyst from St. Louis.
Long-term economic devastation is expected for Japan as the country tries to confront multitude of problems of epic proportions. Earthquake/tsunami/nuclear meltdown that hit Japan two weeks ago has rendered the Japanese economy practically out the global equation. That’s in addition to Tokyo's constant grappling with biggest debt burdens of all time and dwindling exports due to global recession.
Another major problem is that Japan not only could no longer afford purchasing US government bonds but it would try to sell its current holdings in order to generate finances necessary for a reconstruction program. That means from now on no body is interested in US government bonds except the Federal Reserve itself, which should in turn put enormous pressures on US dollar until promptly collapsed.
Analysts predict, the US-led coalition of oil-dependent countries would engage themselves in open aggressions toward others as a way of compensating their upcoming dollar dilemma.
|Last Updated on Wednesday, 23 March 2011 15:00|