Chavez blames US for oil prices ruling high:

Indo-Asian News Service ^ | March 7th, 2005

[M. Espinola]

[India News]: Bangalore, March 7th, 2005 : Venezuelan President Hugo Chavez Monday held the US, especially President George Bush, responsible for the continued rise in petroleum oil prices in global markets.

Addressing a press conference on the conclusion of his four-day visit to India here, Chavez said one of the reasons for the escalation of oil prices was the US invasion of Iraq and its failure to contain the raging violence, kidnappings and disruption of oil production in the war-ravaged country.

"Though global demand for oil has been outstripping its production, we have to admit the Iraq war and the failure of the US troops to restore order have led to disruption of supplies and escalation in prices.

OPEC NATIONS

"Iraq, which was producing two million barrels per day before the war, is now able to produce only one million barrels per day. The supplies are further hit due to violent attacks on its oil terminals and refineries. As a result, oil in Iraq is the most expensive in the world," the president said.

Accusing the US of invading Iraq with the sole aim of taking over its oil assets, which are the world's second largest reserves, Chavez said Bush, US vice-president Dick Cheney, US Secretary of State Condoleezza Rice and US Defence Secretary Donald Rumsfield had vested interests in Iraq's oil as they had high stakes in the oil business back home.

"The US troops thought they will be welcomed in Iraq as great liberators. Even before they could restore normalcy, its government went about awarding lucrative contracts worth billions of dollars for rebuilding Iraq to private companies in the US.

"So far, however, the US is not able to control Iraq. I doubt it will ever succeed. To make matters worse, the US is now threatening to attack Iran," Chavez claimed.

Referring to the volatility in oil prices, Chavez said though the price of a barrel was $12 in 1974, $41 in 1981 and $25 in 1990, the average price in those 16 years was $26 per barrel.

"If you compare the price rise in other commodities, be it cars, wine, rice or even a house, they have shot up by over 15 times. If we do some cost analysis and apply the same methodology, oil prices should have been ruling at a whopping $260 per barrel, which is what Bush and his colleagues want.

"But we, that is the OPEC (Organisation of Petroleum Exporting Countries), will never allow the prices to rule at such high rates. We want to price it at much lower than they are prevailing currently," Chavez said.

Hinting that oil prices would continue to rise in the wake of demand outpacing supplies, he said he expected prices to stabilise between $30 and $40 per barrel in future provided market forces were allowed to have a fair play.

"While the US is primarily responsible for the oil prices ruling high, it wants to blame OPEC for the volatility in the global market. But we (OPEC) will continue to monitor the market and regulate supplies to maintain price stability. But the days of cheaper oil have gone forever.

"Nevertheless, I would like to remind the world that oil is not going to last long. Being a non-renewable energy, it will be extinct one day. Mankind has to find alternate sources of energy, such as solar, wind or hydro power, if we have to survive," Chavez asserted.

Graphics added

[cripplecreek]

Poor Hugo feeling lonely and impotent.

[ozarkgirl]

Oh puhleeze, is there nothing in this world for which we are not to blame? I understand we're now getting sued for the Tsunami!

Besides, I blame China for high gas prices, apparently they are getting right up there with America's consumption of oil.

[M. Espinola]

Poor Hugo Chavez seems to have forgotten little facts such as the Chinese building boom and all that required, expanding energy consumption, with no end in sight.

[SF Republican]

Its that pickup truck the President drives around Crawford, he should get something that uses less gas.

[NY-YANK]

So which is it?

Venezuelan President Hugo Chavez said Saturday that the Organization of Petroleum Exporting Countries could fix a price for oil in a range of US$40 to US$50 per barrel, adding low petroleum prices were a thing of the past.
http://www.taipeitimes.com/News/worldbiz/archives/2005/03/07/2003225871

[M. Espinola]

With Hugo it's always rather difficult to reach a conclusion on anything he says.

Here is yet another news item:

March 7th, 2005 4:55 P.M. ET 'Venezuela will have no problems finding buyers for its oil if President Hugo Chavez halts exports to the United States if U.S. aggression against his country takes place, Venezuela's oil minister said Monday.' news source

In the article you posted Hugo makes the following statement. "The world should forget about cheap oil. It will never go back to the US$10 per barrel rate that prevailed in those days," he added."

Anyone who has ever traded crude oil options or futures knows one should never say never, when it comes to the future of oil price trending.

Not that long ago during 1999, oil prices slide dramatically, down to almost $10 a barrel. In one year's worth of trending oil rocketed back to the low $30 in 2000, then dropped again, to $18 in 2002. Three years later in early 2005, the current price is is close to $54.

[M. Espinola]

He's the President, let him drive a limo around if he wants to :)

[NY-YANK]

I guess my confusion is whether or not Chavez is hinting at OPEC setting the price per barrel and moving away from a market valued cost. Hopefully no one is taking him very seriously.