conspiracy theory: US military oil-price manipulation

[phantom power]

I think this misses the mark a little bit, in the sense that the average American voter reacts to gasoline prices, not oil prices. But it's an interesting take.

Now, a matter of speculation circulating in the rumor-stream of the Internet is the idea that some large entity (i.e. the US government) has managed to manipulate the oil markets in order to calm the voters down prior to the fall elections. Personally, as I have expressed countless times, I am allergic to conspiracy theories. Oil prices are not actually set by the oil companies or the exporting nations. Prices are set on the futures and spot markets, where major buyers of crude bid on either short-term or long-term contracts for the stuff, in order to run their enterprises in a rational, businesslike way. Earlier this summer they bid the prices up.

Some buyers may have simply dropped out as the price of oil exceeded their practical ability to pay -- and by this I mean mainly the governments of Third World countries. This would represent significant demand destruction, but the pain incurred by people in Third World economies would likely occur off the "radar screen" of the US news media. (How many Americans, for instance, are up-to-speed on the horrific economic suffering in Zimbabwe?).

(...)

But here's one thing I wonder: what if the number one user of oil products in the US had laid in huge inventories of the stuff earlier in the year and has lately withdrawn from bidding in the futures and spot markets? I am speaking of the US Military. It would make sense, against the background of Iran rattling its nuclear capabilities, and the Israel / Hezbollah affair, that the US armed forces filled their tank farms to the max this summer and are now stepping back from bidding on any additional oil for the time being. This could be easily "managed" by the people who run this massive organization -- namely, the President, the Secretary of Defense, and the rest of the civilian authorities based in the executive branch of the government. They don't have to consult with congress on their oil purchases.

I apologize for veering into conspiracy territory on this -- and I don't have a shred of evidence that this is happening. It's just a thought, a caprice, a "wild hair," a theory. Surely there is some enterprising graduate student or trust fund nerd on the peak oil web sites who might investigate this dark notion. Has the US military gone on an oil-buying vacation as we head toward the elections?

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2006/09/a_wild_hair.html

[Broken_Hero]

1. Good reading....nt