Oil Prices:
Saudi Arabia, at the begging of the G-8 nations, will increase oil production even more than originally planned.
1) While the Saudi call for OPEC to boost petroleum production by at least 2.3-million barrels per day sent the U.S. stock market upwards, many investors remained skeptical and oil prices two weeks ago, the first trading day after the OPEC promise, finished higher than they began.
2) The issue of oil prices is politically crucial, as an indicator both of the prospects of the U.S. economy and of fears and anxieties about the Iraq war, Middle Eastern stability and terrorism in that part of the world. In short, oil is the crossroads of Bush's two possible major weaknesses.
3) The skepticism among commodities traders stems from questions about Saudi Arabia's ability to sway OPEC, and OPEC's ability to produce 26-million barrels of oil per day even if it tried to.
4) The demand for oil is accelerating at a furious pace, due, in part, to Asia's rapidly growing demand for oil. China is the fastest-growing importer of oil, and Indonesia, despite its place on OPEC, now imports more oil than it produces, putting it the same class as the U.S. and most of the world.
5) On the American political front, gas prices are the most visible prices, and their current height, combined with remaining worries about low wages and unemployment, makes Americans fear that their quality of life is lower now than it was four years ago.
6) Also, Kerry hopes he can point to the high gas prices as a sign that Bush's foreign policy has created more problems than it has solved as far as Middle Eastern stability. Kerry's lobbying for alternative fuels has more poignancy as the U.S. dependence on foreign oil causes more problems.
7) On the flip side, Kerry's credibility on the issue takes a blow from his opposition to domestic oil drilling as well as windmills. This appears to be a trend in much of the campaign, where Bush's weaknesses are at least as weak for Kerry. The war, where Kerry has advocated the same policies Bush has carried out, is an analogous case.
8) OPEC will discuss Saudi Arabia's proposals in their June 3 meeting.
Russia-WTO:
Russian President Vladimir Putin appears to have abruptly reversed his stance on the Kyoto global warming treaty, winning the favor of the European Union, and paving the way for Russian entry into the World Trade Organization.
1) The apparent about-face by Putin on Kyoto leading to the EU's embrace of Russian entrance into the WTO is troubling to conservatives and to White House officials, for different reasons.
2) The Bush Administration had prided itself on fostering new relationships-with Russia and Eastern Europe-while playing tough with traditional allies such as Western Europe. One sticking point between the U.S. and the EU has been the U.S.'s rejection of the Kyoto treaty on curbing Carbon Dioxide emissions in an effort to slow global warming.
3) According to Kyoto's guidelines, either the U.S. or Russia needed to join the other nations who have already ratified the treaty in order for the treaty to go into effect. As long as both nations were holding out, as Putin suggested earlier Russia would, Kyoto was stalled.
4) The U.S. favors Russian entry into the WTO, but U.S. officials are displeased with Putin's rapid turnabout and courtship of Europe.
5) The media, in reporting that Putin has embraced Kyoto, are misrepresenting the nature of the Russian's comments and actions. Putin has promised to accelerate the parliamentary process of ratification or rejection of the treaty. The President neither has unilateral ability to ratify the treaty, nor has he promised to work for its passage, but instead for quick action on it.
North Korea:
U.S. d???? ©tente with Libya has yielded a side-benefit: evidence that North Korea is active in the business of proliferating nuclear weapons technologies to rogue regimes.
1) U.S. and European officials told the American press that inspections in Libya have revealed that North Korea may have supplied two tons of Uranium to Libya. This unsettling revelation comes at a time when relations with North Korea are uncertain for the U.S.
2) The agreement by Libyan ruler Mommar Qadaffi to disarm and submit to weapons inspections is considered as the most unequivocally positive fallout from the U.S.'s liberation of Iraq. Bush Administration officials hope that more benefits can spin out of the new open door in Libya-benefits that they can cite as further successes of the Iraq War.
