From Humble Beginnings, Oil Inherits the Earth

NEW YORK (Reuters) – Oil prices surged on Friday to
the highest level since September’s hurricanes crippled oil output from
the Gulf of Mexico, as tensions mounted over OPEC-member Iran’s nuclear
ambitions.

U.S. crude oil gained $1.52 to $68.35 a barrel after hitting a peak of
$68.80 – the highest level since September 2, while London Brent crude
rose $1.20 to $66.43.

Crude prices have jumped more than 8 percent so far this year, bringing
them within striking distance of the record $70.85 hit August 30 after
Hurricane Katrina toppled rigs and slashed output from the Gulf of Mexico.

"The market is so delicately balanced," said Mark Keenan of MPC
commodity fund. "It faces a convergence of bullish factors."

from Reuters

Love those financial euphuisms, Mark. Regular Dowbrigade readers
will recognize a familiar
theme here. In
what we consider the History of the Species all-time #1 business scam,
the Energy Sector has taken effective control of the world economy and
is siphoning an appreciable and unprecedented percentage of the Global Gross
Planetary Product (GPP) into its visible and invisible financial conduits.

Along the way they have taken effective control of the world’s #1 military
and economic power, but this is almost incidental and certainly transitory.
It won’t really matter in 2008, when the Dems (unlikely) or the Republicants
(moderate Republicans funded by banking, insurance, pharmaceutical and
technology money, not oil) unseat the neo-con cabal. The oil industry
has the world by the balls, and they aren’t letting go until the last
barrel is burned.

The betting here is that they are already planning a "peaceful
transition" to "next-generation power generation." This will mean a
runup to $300
a barrel oil and over $10 a gallon for gas, followed by a panicked government
sponsored (taxpayer funded) initiative to a) save fuel, so what they
got lasts longer, and spend a shitload of money on some non-fossil
fuel energy source.

Obviously, they will go for some technology with a centralized distribution
model so that our energy can be metered and paid for, thus preserving
the supremacy of the "Energy Sector" beyond the twilight of the petrochemical
period.

Meanwhile, secondary beneficiaries include the countries that actually
have the oil and gas, as long as they mind their p’s and q’s. Expect
regular examples to be made of countries who deny or condition access
to their resources by the Sector. See Iraq, Venezuela. On the other hand,
the current supply/demand situation is in such "delicate balance" that
these periodic slapdowns also play into the hands of the Sector. Brilliant,
no?

Desperate China is casting acquisitive glances far and wide. Expect
Bolivia to open up as a Latin-Chinese franchise operation as their
huge natural
gas resources are sucked into the yawning Asian maw.

Welcome to the future. Energy. Water. Information. People. Mix well
and stand back.