OIL PRICES, CONSUMPTION CONTINUE SLIDE

An article by Neil King, Jr. of the Wall Street Journal should have conservationist Americans dancing with joy. However, only half the story is actually good news. If these prognostications are true, then the West has some measure of hope of curtailing those runaway oil prices that help cripple our economy this past year. However, the general wisdom that oil prices need to be at a certain level in order to fuel exploration of other energy resources needs to go the way of $140 a barrel oil prices.

Because this week's outlook also included news that the frackas between Russia and the Ukraine has interrupted the delivery of energy resources to Europe, this is not the time for a return of the freewheeling energy glutton America had become. The United States cannot continue to delay its search for viable alternative fuel technologies. The following article and the news out of Russia are testament to the cold hard fact that we need inependence from our energy masters. King writes:

The global downturn is thwarting efforts by Saudi Arabia and other big oil exporters to prop up prices of crude amid rising supply and dwindling demand.

Big producers in the Organization of Petroleum Exporting Countries have struggled for months to keep pace with global economic woes, which have sent oil prices down more than 70% since July.

The world's biggest oil exporter, Saudi Arabia, tried to nudge the market up this week by announcing plans to cut output to its lowest level since 2003—around 7.7 million barrels a day, which would put its production roughly two million barrels a day from the summer. Other OPEC members, including Venezuela, are calling for another round of cuts when the group meets next in March.

Global economic woes continue to trump OPEC actions amid signs of weakening energy demand in almost every corner of the world. Reports of rising crude stocks and falling retail sales in the U.S. drove oil prices down again Wednesday, with U.S. benchmark crude settling at $37.28 on the New York Mercantile Exchange, down 1.3% from Tuesday.

OPEC's 12 members last month announced the group's largest supply cut—2.2 million barrels a day—after pledging to cut two million barrels a day in the autumn, when the slowdown began to take hold. OPEC produces about 40% of the world's daily oil needs, which now run around 84.5 million barrels.

OPEC officials expressed concern that the market thus far has been unaffected by the cuts, which have been more disciplined than many analysts predicted. OPEC officials say they hope the cuts will begin to register soon and help drive prices back above $50 a barrel. But pessimists within the cartel say continuing bad news could drive prices well below $30 a barrel in coming months.

Saudi Oil Minister Ali Naimi, speaking at an oil conference Wednesday in New Delhi, said prices had fallen below the level warranted by market fundamentals. The oil market, he said, needs prices that "encourages investment, helping create a climate conducive for the development of all viable energy sources." Mr. Naimi recently put that price at $75 a barrel.

Nonsense. Development of new technology does not compete with oil production. Delivery of those technologies may one day compete, but that is no reason to delay the process of finding and perfecting an alternative to oil. If oil did not exist, what then? This general economic wisdom is bunk. Thomas Edison's perfected electric light technology was to compete with gas lighting, but buildout costs were enormous.

The battle between electric and gas lighting lasted some 30 years, and although advances were made in gas-lighting technology, electricity won out. During that time, the Cleveland OH City Council, viewing comparative costs, voted to go back to gas light in 1883 but reversed itself 17 days later. About the time that Brush was developing his arc light, Thomas Edison designed a practical incandescent lamp which later had great significance for Cleveland, because the companies that formed the National Electric Lamp Assn. in 1906 centered much of their light-bulb production in this area. When NELA became the National Quality Lamp Division of GENERAL ELECTRIC CO., it established Nela Park in the suburbs. The division took the leading role in GE’s incandescent lighting development program from 1915 until 1935, when fluorescent lighting research became prominent.

For years, the world's oil surplus was negligible. This year, OPEC's spare capacity is expected to surge to around four million barrels a day, according to the U.S. Energy Department. In 2009, global oil demand will fall by 800,000 barrels a day—the sharpest retreat since the recession of the early 1980s, the Energy Department predicts.

Gasoline demand is down almost 4% in the U.S. from a year ago, despite the drop in fuel prices. The U.S. is now importing about 750,000 fewer barrels a day than it did last year. Yet crude and refined-fuel stockpiles rose by 9.8 million barrels last week, the Energy Department said Wednesday. Stockpiles at the country's main delivery point for U.S. crude in Cushing, Okla., are at record highs.

OIL PRICES SET TO JUMP

JUST AS AMERICANS ARE FINALLY beginning to reap the benefits of plunging gasoline prices—including more money in their pockets—OPEC is getting ready to squeeze them once again by cutting oil production and driving up prices to refineries.

The 13-nation global oil cartel—which includes Mahmoud Ahmadinejad's Iran and Hugo Chavez's Venezuela—will hold an emergency meeting in Vienna Friday to discuss the steep and rapid decline in oil prices.

"The era of cheap oil is finished," Iran's Oil Minister Gholamhossein Nozari boasted on Tuesday. When asked what price Iran would want for its oil, Nozari declared, "The more the better."

"A few member nations have voiced their intentions of pushing for a cut in production, including Qatar, Iran, as well as OPEC's president Chekib Khelil, who said that output could be slashed by as much as 2 million barrels a day," analysts for Raymond James & Associates told MarketWatch.com.

When oil peaked at more than $147 a barrel in July, gas prices soared to above $5 a gallon in some parts of the U.S., and Americans were forced to cut back on driving. With the price of oil at about $73 a barrel on Tuesday, pump prices have fallen to as low as $2.30 a gallon.

The price dip in oil—and gasoline— finally is working its way into the beleagured American economy, putting a few extra dollars in the hands of consumers just as the home heating and holiday shopping seasons begin.

Read it all.

DETECTING OPEC'S FINANCIAL JIHAD

CAPITALISM IS A GAME PLAYED BY MANY. It is the opinion of several folks, including Walid Phares that OPEC has manufactured this attack on the global markets. This idea was also discussed on Bill O'Reilly's broadcast tonight with Ben Stein and Fox Business analyst Elizabeth Macdonald, although earlier in the broadcast O'Reilly was adamant with Newt Gingrich that Barney Frank, Chris Dodd, Henry Paulson and others should be investigated and held accountable for their role in the meltdown of the mortgage market.

Was this financial crisis actually planned by the likes of George Soros, which then got out of hand? One thing is certain—Soros made a billion pounds out of the sterling crash of ‘93. That's on the record, and he seems proud of it. He is sometimes referred to as the man who broke the Bank of England.

But, based on what I have been monitoring with concern to both the stealth and the unmasked jihadist movements the past two years or so, I tend to agree that key pressures exerted by an aggressive OPEC is the trigger that began the domino effect around the global financial markets, an effect that still has a way to go. Read what Phares has to say....

Who manufactured the financial meltdown? It wasn’t only Wall Street: OPEC’s heavy hand is felt but unseen by the media and our politicians.

In bypassing a narrow economic analysis of the ongoing crisis, we can detect clearly the connection between the dizzying ups in petrol pricing and the slowing of American buying capacity. Though we have to conclude that while it is due largely to both Wall Street’s corruption and politicians’ abuse of the system handed the tools of doom to the middle class, Main Street’s rapid disenfranchisement was manufactured overseas, thousands of miles away, at the hands of many of the members of OPEC, the oil-producing Cartel.

Indeed, as economic commentators tell us (including a strong accusation leveled by real estate tycoon Donald Trump on Fox News against OPEC), the oil powers are behind the instability that crumbled the will of millions of middle class Americans over the past three years.

If we go back in time, we can see that oil pricing by OPEC’s hard core shows clearly that US leadership wasn’t able to convince the top producers from the Gulf to give American oil consumers a chance. Most producing regimes replied that demand—mostly from China and India—was putting pressure on production. Pressed by Washington to produce more, the “regimes” alleged it would affect the selling price and thus minimize their profits, but promised they would try to “be understanding” of US needs in energy.

This attitude gave the producers discretion over price, while Jihadi propagandists roamed the media accusing Washington of putting unbearable pressure “on the region” to follow American injunctions in setting petrol’s prices. Was there a direct connection between the oil regimes and the Jihadi propagandist machine? We have no answer to that now, but clearly an oil strategy was in the works with a calculated impact on the US economy. This charge is still in its early stages, it will be challenged ferociously, but it will stand as long as convincing answers are not provided.

What adds to the inquiry into the OPEC destabilization factor are the many indicators that strategic political motives have appeared to be behind the pricing maneuvers. Over a period of half a decade, many voices heard on the region’s airwaves have intimated that the US economy will be made to pay for what America’s leadership is doing. Commentators, some funded by oil producers on several outlets including on al Jazeera, underlined that as long as average citizens in the United States (and eventually in the West) don’t feel financial pain, the war on terror and spreading of Democracy won’t be stopped.

Sheikh Yussuf al Qaradawi, Muslim Brotherhood ideologue and mentor of the Qatari-funded channel, spoke openly of Silah al Naft, i.e, “the weapon of oil.” Indeed, it was called a weapon—as in a warfare situation—and most likely it was used as such. Of course, the producing “regimes” will deny the existence of a real strategy to bring the US to its knees by striking at its pumps. They will dismiss statements made by emirs and commentators in this regard. The “field Jihadists”, however, won’t deny the existence of such a battlefield.

For years now, Salafist web sites and al Qaeda spokespersons have loudly called for an “oil Jihad against infidel America and its lackeys.” Online material is still circulating. But more revealing are the official speeches by Osama Bin Laden and his deputy on the “absolute necessity to use that weapon.”

Ayman Zawahiri called expressly and repetitively on the public to sell their US dollars and buy gold instead (Be’u al dullar washtaru al zahab). These were stunning statements ignored by most analysts at the time but that are making sense today. He predicted a collapse in the infidels’ economy, starting from American markets. Was he a part of the lobbying effort in the OPEC game? Most likely not, but he seems to have been privy to the game, having insiders in the Wahhabi radical circles in the Peninsula: in the end there are too many political signs to dismiss and the analysis of price warfare is too evident to ignore.

OPEC’s manipulation of the markets did hit Americans hard in their pockets. Hundreds of millions of John and Jane Does were intimidated, terrorized really, into abandoning their lifelong dreams of owning properties because of the aggressive stance of petro-regimes towards the US and its campaign to spread democracy in the Greater Middle East. In historical terms, America was punished for daring to change the status quo in the Arab and Muslim world to the advantage of the weakest and the suppressed: Shia and Kurds in Iraq, Syrian reformers, Lebanese civil society, Africans in Darfur, Iranian women and students, artists and liberals across the Arabian Peninsula. In return, the U.S was submitted to economic destabilization, steady, gradual and by small doses.

Let’s not underestimate the power of the Jihadi-oil lobby in America: it has decades of influence and it has long arms into the system, and it has powerful political allies. It knows when Americans are messing up their own system, and it knows very well how to push them over the cliff, into the abyss of economic calamity.

A counterpoint to this thesis would vigorously argue that the alleged OPEC destabilization over the US economy is illogical, as many countries in the Gulf are experiencing a recession as a result of Wall Street’s crunch. In other words, they wouldn’t do it to themselves. Yet the ideological forces manning the oil weapon aren’t particularly concerned about economic stability. Their driving factor is Jihadism. We’ve heard their ideologues stating that even if they were to incur losses among their own societies in order to defeat the infidel powers, then let it be.

Read it all.

Dr. Walid Phares, author of Future Jihad: Terrorist Strategies against America, of The War of Ideas: Jihadism against Democracy and of the forthcoming book, The Confrontation. He is also the Director of the Future Terrorism Project at the Foundation for Defense of Democracies.