Gadhafi goes apeshit. Oil prices spike.
http://finance.yahoo.com/news/Libyan-turmoil-hits-stocks-as-apf-1471605558.html?x=0&.v=13
With deep rifts opening up in Moammar Gadhafi’s regime, air force pilots defecting and a bloody crackdown in the capital of Tripoli, investors are fretting over how the crisis will end and what the impact on the North African country’s oil production will be.
Libya is the world’s 18th largest oil producer, pumping out around 1.8 million barrels a day, or a little under 2 percent of global daily output. The OPEC country also sits atop the biggest oil reserves in the whole of Africa.
Expect regular unleaded gas prices to exceed $3.40/gallon soon and exceed $3.75 in the summer. World instability has a knack for sending globally-sourced energy costs through the roof.
“World instability has a knack for sending globally-sourced energy costs through the roof.”
So does knee-jerk reactions from speculators who have never seen a barrel of crude in their lives yet make millions buying and selling it without ever taking delivery of a single barrel.
Add to that Republicans who are happy to see high oil prices as it makes their contributors richer, and Democrats who are happy to see them high because of their environmentalist agenda and because it makes their contributors richer, and you get a nice recipe for disaster against the middle class. Last time we saw gas over 4 bucks a gallon the prices tumbled when the economy went in the crapper. The economy has a short memory obviously, just like the idiots who run it.
The USA relies on long-haul trucking to move it’s products around, the cost of which is directly tied to the price of diesel. Expect food prices to spike again soon, and the idiotic insistence of expanding corn-based ethanol to keep the farmers happy in the midwest isn’t going to help food prices either. Meanwhile wages will stay flat, unemployment will stay high, etc. etc.
Basically more of the same we’ve seen in the last 10 years. The more things change the more they stay the same.
Full agreement to all of the above.