Reply #100: It's a bubble.

[fasttense]

Ravi Batra predicted this bubble when the recession 1st hit. Since we have rescued the uber rich, they have to find a place to park all their unnecessary money. (They don't need to spend it, they have everything they need or want.) Since the CDOs and other mortgage backed crap is known to be worthless, they need something solid and real. So, speculators are buying up gold, oil and other commodities. Simply put, with the help of the bailout, they are re-inflating the bubble.

This was a good post on DU:

"“That’s how we have developed a massive glut of 677 million barrels worth of contracts in the front four months on the NYMEX and, come rollover day – that will be the amount of barrels ‘on order’ for the front 3 months, unless a lot barrels get dumped at market prices fast.

“Keep in mind that the entire United States uses ‘just’ 18M barrels of oil a day, so 677M barrels is a 37-day supply of oil. But, we also make 9M barrels of our own oil and import ‘just’ 9M barrels per day, and 5M barrels of that is from Canada and Mexico who, last I heard, aren’t even having revolutions.

“So, ignoring North Sea oil, Brazil and Venezuela, and lumping Africa in with OPEC, we are importing 3Mbd from unreliable sources and there is a 225-day supply under contract for delivery at the current price, or cheaper, plus we have a Strategic Petroleum Reserve that holds another 727 million barrels (full) plus 370M barrels of commercial storage in the U.S. (also full) which is another 365.6 days of marginal oil already here in storage in addition to the 225 days under contract for delivery.“

These contracts for oil outnumber their actual delivery, a sign of speculation and market manipulation, as oil companies win government authorizations for wells but then don’t open them for exploration or exploitation.

It’s all a game of manipulating oil supply to keep prices up. And no one seems to be regulating it."

There is so much oil out there, they can no longer store it in the US.

But Obama says he can't do anything about it except to drill baby, drill.

The complete piece is at: http://www.consortiumnews.com/2011/041911a.html