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Archive for March, 2011

Manipulating price?

Is someone forcibly keeping WTI (West Texas Intermediate) low? Given the trouble in Libya, why is it only up by  only 10%?

If they are, then year end price will be around 120, and not 150. Nevertheless, oil prices are irreversibly on an upwards trajectory. We may see short term falls, but no long term decrease in price. No turning back from here.

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As oil prices increase (somewhat irreversibly) the price of food in the West are going to go up- for the very simple reason that their farms and delivery system is so oil dependent.

If the food prices rise in the West, there will be more food exports to the West from the countries that produce food for cheaper. Because the Western countries typically have more purchasing power (for the moment), the prices of food are going to go up globally.

It is critical then that the countries that are import-dependent just because imports are cheap must focus on food production in their own countries. They are in for big trouble if they don’t manage that within next one-two years.

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