Wednesday, January 03, 2007

Troop surge and oil prices :: WSJ blog

A “troop surge” in Iraq could trigger a surge in oil prices, too, says Joseph Quinlan of Bank of America.
. . .
Quinlan raised the specter of greater anti-American sentiment overseas, and a backlash against the dollar, “with petro-states like the United Arab Emirates, which just announced its intention to diversity out of the U.S. dollar, leading the way.”
The UAE is not an anti-American state, nor is it filled with a populace that is anti-American. Just to be clear, it has diversified its portfolio for purely economic reasons.

Quinlan also is quoted as saying such an oil price surge could knock the wind out of the global economy. I'd say most of the increase in oil prices that we have seen throughout the war has been demand driven - growing demand in India and China - and not due to troop levels. Why should that change now?

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