Oil Up, Stocks Down

by benborden

Stocks are down today because oil is over $86 a barrel, a new record. Oil is up that high in part because of fears that northern Iraq might be invaded by Turkey in an effort to put down Kurdish rebels. Turkey is only considering this because of strained relations with the US. Those relations were strained by a US House resolution condemning the Turkish action in Armenia 80 years ago.

Whew! How do things get this complicated? The world has no reserve capacity of anything anymore. It’s not as if a shortfall in oil can be made up by pumping more out of West Texas. Everything is running full-out, so the smallest disturbance has consequences for everyone. At least we seem to have gotten out of hurricane season!

No matter how anyone feels about oil and how we use it, the big issue is capacity. We simply can’t pump it out of the ground fast enough, and that makes us vulnerable to the flapping of a butterfly’s wings somewhere far away. Either we need to find more of it or we have to conserve it, because the situation right now makes everything in our economy jittery over everything anywhere in the world.

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