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Raymond J. Learsy Headshot

The Oil Patch's Unrequited Schadenfreude as Ernesto Veers North

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Today For the first time in two months the price of oil
closed under $70 barrel. The October contract closed at $69.71/bbl
on the New York Mercantile Exchange, the lowest price
Since June 20.

Bloomberg quoted a broker in New York commenting "The nervousness about the storm is evaporating. On Friday it looked like Ernesto would go right into the Gulf but by Sunday night it was clear that it wouldn't be moving west". Or as another analyst seemingly lamented "It doesn't look like there will be any storms heading for the Gulf in the short term. There are forecasts for hurricane activity but it all appears to be focused on the East Coast".

Perhaps it just in the eye of the beholder, but barely one year later, there seemed a tinge of remorse within the oil patch that there was
not going to be a repeat of that aspect of Katrina that provided an invitation to ever higher spikes in oil and gasoline prices. That the hurricane season was coming to an end and Ernesto was not going to play its assigned role of Katrina Redux.

Where have we come to, when the rest of the nation, still bearing witness
and traumatized by the scope of New Orleans' tragedy, dreads even the prospect of another Katrina. While, on the other hand, the oil patch silently, surreptitiously (at least in this writer's perception) has seemingly ambiguous
motives and objectives on this calamity.

The dichotomy between the interests of the nation, its well being,
and the fortunes of the oil patch, have rarely been so clearly at variance.
It is a situation in which the nation has found itself since 9/11 and that has deteriorated grievously with the evolution of the Iraq War. Whenever the news is bad for the rest of us, be it war, political upheaval, terrorism, anarchy, revolution, typhoons and hurricanes its good news for Big Oil. They prey on our fears permitting them to push prices of oil ever higher (over 400 percent in the last five years.).

And yet there is hardly a voice in Government that seeks to bring
this outrage back into balance, to initiate programs that cause
the nation and the oil industry to have parallel aims and a shared
destiny. To reestablish a balance where the oil industry no longer only
profits by the nations tribulations, but finally begins to carry its fair share of our common ordeal.