Sunday, November 18, 2007

Better Fill The Tank Today

The Guardian Unlimited/Observer (UK) reports that a private meeting of Opec leaders, gathered this weekend in Riyadh for the cartel's third meeting in its 47-year history, was broadcast for more than half an hour after a technician had mistakenly plugged the TV feed into the wrong socket:
On Friday night, during what the participants thought were private talks, Venezuela's oil minister Venezuela Rafael Ramirez and his Iranian counterpart Gholamhossein Nozari, argued that pricing - and selling - oil using the crippled dollar was damaging the cartel.

They said Opec should formally express its concern about the weakness of the dollar when the cartel makes its official declaration at the close of the summit today. But the Saudis, the world's largest oil producers and de facto head of Opec, vetoed the proposal. Saud al-Faisal, the Saudi foreign minister, warned that even the mere mention to journalists of the fact that leaders were discussing the weak dollar would cause the US currency to plummet. ***

The weakness of the dollar is one reason why oil prices are so high, as cartel members seek to compensate for their lower earnings. This means a further drop in the dollar is likely to be accompanied by a rise in oil prices.
Commodity and currency traders said this weekend that oil prices would surge again on Monday likely breaking the $101 per barrel record set in the during the Oil Crisis of the 1970s and that the already weakened dollar would plunge further due to the unintentional broadcast.

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