Sunday, April 02, 2006

Chavez Makes Bid to Peg Oil at $50 Per Barrel

Most people think of the Middle East as the source of the world's oil, but Venezuela is making a bid to become the worlds new supplier. President Hugo Chavez want to permanently lock-in the price of petrol to $50 per barrel. Currently, the price of crude oil is $66.01 per barrel. Chavez's pegging of the price would no doubt lower the price of heating our homes and driving our cars by nullifying the speculation market that pushes commodity prices higher.

Venezuela is poised to make such a dramatic proposal because nearly 90% of the worlds crude oil in located under its soil and in offshore wells. Chavez claims its enough oil to power the world for 200 years, by which time the world will have hopefully moved beyond fossil fuels. Pegging the price of oil is likely to anger U.S. oil traders and Middle Eastern oil barons because it will dramatically cut into their record profits, but the average consumer will be the winner. Viva Citgo!