Rita causes record damage to oil rigs

Hurricane Rita has caused more damage to oil rigs than any other storm
in history and will force companies to delay drilling for oil in the US
and as far away as the Middle East, initial damage assessments show.

High oil prices and the desperate
search for new oil supplies needed to meet rampant demand from the US
and China have made rigs difficult to find and expensive to hire. Rigs
cost $90m-$550m to construct, depending on how sophisticated the
structure and how deep the water in which it will drill. A rig ordered
today is unlikely to be ready before 2008 or 2009, analysts said.

But after these two hurricanes, there are sharply fewer rigs available.
Plus much of the Gulf workforce will be working on clean-up and repair,
not on producing oil. Well, those workers who can be located and who
still have homes to return to, that is – after they get the electricity
turned on, the roads repaired, and the water drinkable.

So why are gas prices dropping a bit after Rita?

It might be because Big Money is seriously short oil futures and
options. They need time to unload these shorts. Thus they need the
price to stay down for a bit.

Here’s how it works. In futures and options you can sell something you
don’t own in expectation of a price drop. This is called going short.
Then, after the price drop, you buy it back cheaper and pocket the
profit. However, if the price rises, you could be screwed. If Big Money
is seriously short oil, then they will want to keep prices down until
they they buy back, or close, their shorts.

None of that had
anything to do with damage assessments from two major hurricanes which
haven’t really even begun yet. As one astute observer noted, “A couple
of months ago if there was one small refinery fire, crude oil futures
went up $2 a barrel. We have two major hurricanes taking all refineries
offline and oil prices fall. What’s up with that?”

Market manipulation is up. That’s what’s up. And I suspect the move is
now on around the world to suck as much last minute “sucker” cash into
play as possible before pulling the plug this winter.

AKA predatory capitalism.