EYE ON TRUCKING: Wanna know real reasons for price of oil going up?
Oil trades on mostly speculation.
By LYNDON FINNEY
The Trucker Staff
5/28/2008
Scatter shooting while wondering what happened to $1 a gallon gasoline …
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You’ve seen them on television.
Those [mostly] young men and women standing on the trading floor littered with pieces of paper, screaming at the top of their lungs trying to buy or sell some stock or commodity.
Ah, a commodity, oil that is, black gold, Texas tea … the price of which is currently a thorn in the side of not only the trucking industry, but the entire country.
The price of oil lately has been pretty much controlled by speculators, probably including some of those traders whose images have become all too familiar.
It doesn’t take much to get the speculators riled up and the price going up.
We checked some Associated Press stories about oil prices. In reports, we found these reasons prices went up:
• Investors got caught up in the stock market’s upward momentum and looked past the government’s report of an increase in crude and gasoline supplies.
• Higher prices were supported by concerns about supply disruptions in Nigeria, where production at a Royal Dutch Shell PLC facility was cut after a weekend attack. The report caused the price of a barrel of oil to climb to near $123.
• Kurdish rebels issued a warning they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq. Oil traders worry that any conflict in the oil-rich Middle East will cut oil shipments out of Iraq.
• Someone dropped a report that oil might actually reach $200 a barrel before long, launching Sen. Peter DiFazio, D-Ore., into a fury during a Senate hearing, saying he wanted to find out if whoever made that speculation had a big finger stuck in the oil pipeline (loosely translated).
In fact during testimony at that hearing, a representative of Public Citizen told the Senators that several analysts have estimated that speculative purchases of oil futures have added as much as $20-$25 a barrel to the current price.
We’ll, those are the printed reasons the price is going up, but we knew those weren’t all the reasons.
So our trusty scribe Dorothy Cox dug through reams of intelligence (and through a few pistachio shells and a couple of jars of peanut butter) and came up with the real Top 10 reasons oil prices have been going up. (When you think about it, they don’t sound too much more flimsy than those reported by AP):
10. Two Dubai residents get in a fistfight and their families and consequently the entire community, get dragged into it. Speculators see the fracas on You Tube and drive up oil prices.
9. A dog hikes its leg on an oil pipeline near Casper, Wyo., carrying Canadian crude. Speculators hear about it and yank up prices.
8. A Kuwaiti oil minister’s sneeze is wrongly translated as “reduced oil output” during an OPEC meeting.
7. Delaware has a cold winter. Or not.
6. Somebody in Iran gets a hangnail, spurring talk of an oil supply disruption.
5. Someone’s mama gets called something bad in Nigeria and oil exports from that country are curtailed.
4. Brent gets caught being crude again (as in Brent crude is selling for … in London).
3. A crew member of an oil freighter off the coast of Russia decides to light up a smoke after too much vodka and borscht (or some other gas-producing meal), causing a fire and a nasty oil slick. Exports are momentarily decreased.
2. Oil speculators are spooked by Halloween e-mail (what are they NOT spooked by?).
1. Osama Bin Laden comes out of his hole and sees his shadow.
So now we know, as Paul Harvey would say, “the rest of the story.”
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On Page 6 of this issue, you’ll find a story written after an interview with Dr. Greg Belenky of Washington State University.
Dr. Belenky was one of the co-authors of a study submitted by the American Trucking Associations to the Federal Motor Carrier Safety Administration about the need to seriously consider changing the 8 and 2 sleeper berth portion of the Hours of Service rule.
Dr. Belenky is adamant (and his position is supported by other sleep experts with whom we’ve talked) that if someone works during the night and sleeps during the day, they don’t need to be confined to a sleeper berth for eight hours. Their circadian rhythm just doesn’t facilitate that much sleep during daylight hours, he said.
What’s more, it doesn’t matter how long a person has been working nights and sleeping days, he said. Everyone’s circadian rhythm is geared for us to sleep better at night.
Dr. Belenky compared the trucking industry to the healthcare industry, which also operates 24/7.
That comment spurred us to find studies about during which hours the most hospital errors occur.
We couldn’t find anyone who had that kind of data, but we did find plenty of data to show the longer a healthcare professional worked during the day or night, the more error-prone they become, especially after 12 or 13 hours on the job.
We also read an intriguing comment at the conclusion of one such report offered by the Joint Commission on Accreditation of Healthcare Organizations (JAHCO). JAHCO is to healthcare what the FMCSA is to trucking.
The JAHCO report concluded: The weight of evidence strongly suggests that extended-duration work shifts significantly increase fatigue and impair performance and safety. From the standpoint of both providers and patients, the hours routinely worked by healthcare providers in the United States are unsafe. To reduce the unacceptably high rate of preventable fatigue-related medical errors and injuries among healthcare workers, the United States must establish and enforce safe work-hour limits (our emphasis).
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Anyone heard from Public Citizen lately?