Remember when conventional war hawk wisdom told us that an Iraq war would bring about a huge drop in oil prices? You know, that thing they actually pretended to believe when they weren’t pretending to believe all that bullshit about WMDs? If you’ve forgotten, per Steve at the Shameless Antagonist, let us refresh your memory:
Roger Kubarych, senior economic adviser for the Americas at Hypo-Vereins Bank, sees the impact from any confrontation as temporary, in part because he thinks Iraq will acquiesce to UN weapons inspections. If there is a war, he said, it could be won quickly. He also said Lindsey’s numbers on the potential cost sounded high.
“I don’t think it will be a big impact. The stock market will go down and oil prices will go up right at the beginning. … This will scare people and they will become risk-averse,” Kubarych said. “Once the war is clearly won, oil prices will drop like a stone,” he added, noting there was already a war premium in oil prices.
Angus McPhail, an analyst at ING Financial Markets in Edinburgh, Scotland, was even more plain-spoken in 2003:
“We are adamant that oil prices will fall,” McPhail said.
Now, one could argue that with 18 casualties today after an assault on Abu Ghraib prison that the war is not yet “clearly won.” But you would be arguing against that selfsame choir of Republicans whose purple fingers beg to differ with you nattering nabobs of negativism, so the point is essentially moot.
I bring it up in light of this week’s Goldman-Sachs Report:
New York light crude futures rose $1.41 to $55.40 after a report from Goldman Sachs said the market is in the early stages of a “super spike” period. Goldman revised its “super-spike” range to $50 to $105 per barrel from $50 to $80 per barrel, Briefing.com reported. The brokerage firm said oil prices will have to rise high enough to curb demand and reduce consumption before prices sink agin.
Nothing like a man with a plan.