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Citizens Electoral Council of Australia

Media Release  3rd of May 2008

Craig Isherwood, National Secretary
PO Box 376, COBURG, VIC, 3058
Phone: 03 9354 0544 Fax: 03 9354 0166
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Oil heading for $200+ per barrel—dump “free” market hoax now!

Algerian Energy Minister and OPEC President Chakib Khelil has warned that crude oil may soon hit US$200 per barrel—$80 above the level reached on April 28th. (According to the Arab News of May 2nd, Deutsche Bank's chief energy economist, Adam Sieminski is saying it could hit $250.)

Khelil repudiated calls by U.S. and European leaders for OPEC to pump more oil from the ground, to “ease prices”, saying that the weak dollar and global political insecurity were to blame for the rising oil prices. A dollar fall by 1 cent alone accounts for an increase of the barrel price by four dollars, Khelil said.

Khelil is not shifting blame. U.S. physical economist, Lyndon LaRouche recently observed that oil producers such as the Saudis, on long-term supply contracts, get around $3 per barrel for their oil at the wellhead. The oil companies (primarily BP, Royal Dutch Shell, Chevron, Conoco Phillips and Exxon Mobil) take it from there.

The London International Petroleum Exchange (IPE) controls the price of 60% of world oil, by controlling the price of Brent Crude oil. Huge masses of “paper oil” traded on futures markets determine the price of the far smaller volumes of real oil. The ratio of paper to real barrels is over 500:1.

According to EIR economics chief, John Hoefle (EIR, May 2, 2008): “With the oil hoaxes of the 1970s, the spot market was created, which, in turn, created a huge pool of dollars centred in the London-based international oil cartel. Through this mechanism, the U.S. government essentially lost control of the dollar, which became a weapon for a speculative assault on the U.S.A. Today, the market price for oil is not set by OPEC, but by the financial markets, which take an increasing cut of the money people pay for gasoline and diesel fuel.”

In an earlier article, Hoefle stated that, “Sharp jumps in the price of oil could be considered indicators of the state of the bubble. When liquidity is badly needed, the price of oil is manipulated sharply upward, providing an influx of cash to the financial system. This functions as a sort of hidden tax, taking money from the public to bail out the bankers.”

Australia’s new Minister for Resources and Energy, Martin Ferguson, admitted to the ABC’s Insiders program on April 27 that the supply of oil doesn’t determine the price. After bragging that Australia’s newly expanded sea boundaries meant a potential boom in oil supply, he confessed it wouldn’t bring down prices: “No, you’ve got to understand that the price of oil in Australia, just like the price we sell our iron ore, uranium, coal and LNG is set by the international market.”

Only a new Bretton Woods-style re-regulation of the international monetary system, underpinned by a return to long-term, government-to-government supply contracts, will stop the hyperinflationary crisis that is gouging people at the petrol pump.

Click here for background articles on the oil price hoax.


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All electoral content is authorised by National Secretary, Craig Isherwood, 595 Sydney Rd, Coburg VIC 3058.