A must read

Here's a great article about the world's oil reserves that was written by someone that really seems to know what he's talking about. So why is oil selling for $100+ a barrel if our supply isn't nearly as bad as the media would lead you to believe? This article touches on it but doesn't talk about it.

One reason is that 90% of the "conventional" oil still in the ground is controlled by state run oil companies. So when whack jobs like Hugo Chavez take all the money they make from there large oil reserves and then use that money on social programs it causes problems. Now I agree that it is good that he is trying to improve the conditions for the poor in his country but at the price of potentially not re-investing in his oil production. That will have global repercussions. Let's not even talk about other places like Nigeria....disaster. Unless these companies spend the money on the oil reclamation equipment like the Saudis have then they'll end up leaving half of the oil in the ground.

The other reason has nothing to do with oil companies. People get all bent out of shape when they see how much profit a company like Exxon is making but guess what....Exxon sells the oil but has very little to do with setting the price. That is left up to speculators on primarily the New York and London futures markets. That means that the price of oil is only vaguely related to the actual availability of oil or the demand for that oil. The price is "regulated" by people that have a vested interest in buying the oil cheap and then having the price rise....seriously. Does that sound like a good idea? Isn't that what Enron got in trouble for, inflating the prices of energy futures for their own profits and the benefit of their traders?

So why is no one crying for this to change? Because the oil companies are huge political contributors and are flush with cash they can throw money at the only people that could change the way the current oil futures market is regulated. So there, I guess you can still blame Exxon.