Wednesday, September 10, 2008

Bark: Money-grabbing fuckwits

Cartels are such a wonderful thing. The biggest one of the lot, OPEC, decided that the price of oil dropping below $100 a barrel yesterday, for the first time in months, is obviously not lining their pockets thickly enough. So what have they done? Cut production to prop up the price.

Did it not occur to them that the reason demand for oil has plummeted worldwide is because no-one can afford to buy the stuff anymore? And if people can't afford to use and fill up their car now, how is restricting supply to keep the price high going to help? It's not like the price of a barrel of oil has ever really been representative of the actual cost of getting it out of the ground and distributing it - recall that oil prices were less than a quarter of what they are now before we blundered into Iraq and destabilised the biggest oil producing region in the world. I have also never grasped quite why the price of natural gas should be connected to that of oil, either, given that they're essentially two completely separate supply chains. It's like linking the price of tomatoes to the price of apples.

The truth of the matter is this: pretty much everyone but the rich are getting financially squeezed by the high price of oil, because it has such an inflationary effect to the whole of the economy. The price of oil drives fuel and food costs, and if you're given the choice between using your car or being able to afford to eat this week, I'm pretty sure most people are going to take the food option and leave the car parked up.

I understand they've got a finite resource and they want to make as much money as they can while they still have it (good old capitalism, eh?), but OPEC's greed is pricing themselves out of their only market. I'm no expert in economic theory, but even I know that if you want to make money, it helps if people can actually afford to buy your product. OPEC are lucky in the respect that they've literally got the world over a barrel - the economy needs oil irrespective of whether the average man on the street can afford to fuel up their car or not, but I do hope consumers leave the car at home more often, tell OPEC to go fuck themselves and teach them a lesson in consumerism - a product is only worth something if you can sell it.
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