$4.00 a gallon for gasoline became a reality here. Covington prices hit $4.00. Fuel prices were predicted to rise as soon as hostilities broke out in Libya, however the catastrophe in Japan kept prices down. Now with Japanese industries reopening plants, the increase demand for oil means higher prices at the pumps.
According to Businessweek, oil declined for the first time in four days in New York after Saudi Arabia, the world’s biggest exporter, said the global market has adequate crude supplies. Crude oil for May delivery slid as much as $1.19 to $108.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $108.66 at 10:55 a.m. London time.
The no-fly zone has turned the conflict in Libya into a ground war. Gaddafi forces are using rockets and mortars to pound the rebels in Central Libya, especially around the city of Misrata. The rebels lack the logistics and organization to move out. The fighting is centered around the oil producing region which has halted Libyan oil production. This leaves the remaining OPEC producers in position to demand more money for their oil.
Now that the Libyan conflict is ground based, and the rebels are stalled, the question is when does NATO/US start moving some ground support? Early in the conflict we heard talks about the United States supplying arms to the rebels. Apparently those aren't enough. Rising oil prices could lead European leaders and the Obama administration to move forces in as a "police action" to secure the oil fields. The same justification was part of the reason why coalition forces were sent into Kuwait. Yes Kuwait had been invaded by Saddam Hussein but in so doing, he controlled a significant amount of the world's crude oil. Libya produces around 2 percent but as we now see, even two percent can create a significant impact at the pump.
Businessweek
“If you would not be forgotten, as soon as you are dead and rotten, either write things worth reading, or do things worth the writing.”--Benjamin Franklin
4 comments:
I am shocked, shocked that Qaddafi changed his tactics and hasn't been quietly waiting for the rebels to come calling. Didn't anyone give him the NATO No Fly Zone Rule Book? Or perhaps he remembered Saddam's fate and realized that if he doesn't come out fighting with everything he's got, he will soon be swinging from the highest minaret. If we dip our boots in a ground war, we had better be ready for the long haul.
Can you say, "mission creep"? I thought you could! No one seems to get the longer we stay, the longer before we get to go home. Of course that assumes we don't find a reason to pick a fight with Iran.
So either we cut and run; or we go in, throttles to the firewall. But we are a bit low on money and fresh troops, and there was a promise, something about no boots on the ground.
Low on money and Gates wants to cut the budget while waging war on three fronts. No boots on the ground but you've got to wonder who is going to be watching over those lovely oil wells?
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