Lowered Oil and Gas Prices: Stage Three of the Bush October Surprise By Hassan El-Najjar

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Oil prices have been lowered in the New York Merchandise Exchange (NYME) to $63 per barrel from the $78 July highest.

As we are approaching the mid-term US Congressional elections during the first week of November, the NIME has demonstrated an amazing discipline and cooperation with the Bush administration.

However, it is absolutely certain that oil prices will rally directly after the US mid-term Congressional elections. The current lower prices represent a service from the NIME merchants and brokers to the Bush administration in return for the huge wealth they have accumulated during the Bush terms in office.

Right now, crude oil big buyers are buying future contracts with low prices. The cycle of huge profits will be completed when an event of "uncertainty" takes place, such as a terrorist plot or a terrorist act. Then prices rally and sky rocket to reach the previous hike of the $78 July level or higher, then the big merchants start selling making more and more profits.

President Bush's falling ratings and the widespread anger among American voters because of the failure of the US occupation of Iraq have been projected to produce an astounding defeat for the War Party of Republicans supporting Bush and his "Permanent War" policy.

Attempting to avoid this expected defeat, the Bush strategists have embarked on a multi-stage plan to influence voters and keep them in the Republican fold.

The pre-planned Bush-backed Israeli war on Lebanon was the first stage of this plan of the "October Surprise." The purported Blair's "Terrorist Plot" was the second stage of the plan. Both stages have aimed at scaring voters by reminding them yet again that the world is still unsafe. They need to vote for the War Party, which is purported to be more efficient in handling "terrorism."

Readers can read a previous article of mine for a background about the subject at:

Stage three of the Bush October Surprise is different in that it lowers the gas prices by 15% (so far) and is expected to lower them more until the elections. The assumption here is that people forget about everything quickly, including the negative consequences of the Bush policies. They will be happy for the lowered gas prices, which will convince them also to vote for Republican candidates.

Are these three dimensions of the Bush October Surprise going to distract American voters away from the horrendous consequences of the Bush policies?

Majority of Americans have by now been knowledgeable about these Bush administration attempts to control their voting behavior.

Actually, I'll be devastatingly surprised if October passes without any more Bush surprises!

Oil prices edged higher Friday but finished lower for the week after OPEC lowered its oil-demand forecast for the rest of the year.

Oil prices lost more than 4 percent for the week, and analysts said there has been a definite shift in energy-market psychology, as traders focus on the relatively comfortable balance between supply and demand as opposed to hypothetical supply threats.

However, Fimat USA analyst John Kilduff said in a research note that geopolitical uncertainty, which helped push prices to an all-time high of $78.40 in July, could eventually re-ignite energy markets.

"In the end, our bias still has to remain with the upside," said Kilduff. "It is only for the moment that psychology has shifted more to an economic track, and even there, we don't see the global economy breaking down, only a softening at the margins."

The Federal Reserve said Friday that the nation's industrial output unexpectedly fell by 0.1 percent in August, reflecting weakness in manufacturing and declines in mining and utility production. Analysts had been looking for a small increase.

Some worldwide economic softening was acknowledged on Friday by the Organization of Petroleum Exporting Countries, which said fourth-quarter demand for its oil would be 320,000 barrels a day lower than previously forecast, or 28.86 million barrels per day.

In 2007, OPEC expects demand for its crude to average 28.1 million barrels per day, or 800,000 barrels per day less than the 2006 average, in part because non-OPEC supplies are rising. As a result, some analysts believe the Vienna-based cartel, which is pumping close to 30 million barrels a day, may end up cutting its output by 1.5 million barrels a day or more.

"It looks for 2007 that OPEC revenues are going to be under pressure, from both price and volume," said Citigroup analyst Tim Evans.

After falling as low as $62.03 a barrel, light sweet crude for October settled at $63.33, a gain of 11 cents on the New York Mercantile Exchange. Still, oil prices remain about 20 percent below the July peak.

"It's been going straight down. We can't be surprised by a rally," said Man Financial broker Andrew Lebow.

Retail gasoline prices, now averaging $2.55 a gallon nationwide, have fallen about 15 percent in the past month and analysts say further declines are likely.

Nymex natural gas futures, which plunged 10 percent Thursday to a two-year low after government data revealed surging inventories, rebounded slightly. October natural gas rose 9 cents to settle at $4.982 per 1,000 cubic feet.

In other Nymex trading, gasoline futures rose by 2.28 cents to settle at $1.575 a gallon, while heating oil futures fell less than a penny to settle at $1.7023 a gallon.