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Thursday, May 29, 2008

King Canute

Gordon Brown and Alistair Darling tried to play King Canute by holding talks in Aberdeen with members of Oil & Gas UK, a trade body for companies operating in the North Sea.

The objective was to call for a cut in oil prices by pushing up production.

Brown called on OPEC to increase production to help lower skyrocketing fuel prices. Brown is also of the view that the best long-term solution is to become a low-carbon economy.

"The cause of rising prices is clear: growing demand and too little supply to meet it both now and — perhaps of even greater significance — in the future.

Our goal that Britain becomes a low-carbon economy is now an economic priority as well as an environmental imperative
."

Whilst all of this hyper activity may make him look busy, it will have no discernible effect whatsoever on the current price of oil.

The current high prices are as a result of a speculative bubble that has disconnected itself from the laws of supply and demand.

Don't believe me?

George Soros says the same:

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