Letters to the Editor
-
I'm nodding too, just not for the same things
During the 2004 midterm elections, Goldman Sachs rejiggered the commodity index to reduce the weighting of gasoline. The move sent funds managers scurrying and drove gasoline prices lower. (Paulson was head of GS before he went public). At the same time Enterprise was paying back oil they borrowed during Katrina. Then a number of surprise inventory builds hit the market, and there was a double whammy of sorts. Now if you wonder how oil is transferred from Enterprise to government storage, you are not alone. Since the SPR is considered to be the sum of both forms of storage, at around 1.5 billion bbls.
Now if these crude oil inventory reports were accurate, there was no reason for crack spreads to go higher, but they did. In fact they went on a tear, indicating there was really much less oil than anyone thought, since the spread reflects the premium between the finished product and the commodity. Was there oil sitting in enterprise storage which really belonged to the government, which was being used to count against enterprise storage?
The manipulation of gasoline prices during the midterm elections is an unreported scandal. Afterwards Bush stood up and proclaimed the SPR was a pretty good thing, and we should make it even bigger. If there was a Congress they would have audited the SPR. There was no Congress before 2004, and there is none now.
Bush is a lame duck, and he never cared a whit about the American consumer as long as he could outsource their job to China, make them run up a pile of debt, and watch them being thrown out in the street while his rich crony banker pals bought up the property for pennies on the dollar. (Maybe that last part didn't work out the way he planned, but Bernanke hs done a lot to save Wall Street, not much to save main street) And of course Bush cares about promoting the Republican political base. The oil companies are pretty close to being utilities, in the business sense, they really don't care how much gasoline they sell, they make their money.
I'm nodding too, just not for the same things.
-
GM Cutting Back On Pickup and SUV Production
Could our wasteful use of gas needed to fuel huge pickups and SUVs somehow contribute to rising gas prices?
Would Bush ever mention conservation as a possible solution to excessive demand driving up prices?
-
Didn't Bill Clinton and Chavez fight over this in the 90s?
I was under the impression that Bill Clinton had a deal worked out with Chavez that if oil got above 30, then Bill would pump from the SPR. If oil got below 20, Chavez would cut supply. This is from Greg Palast's armed madhouse. That Bush isn't using the SPR to play the markets is taxing the American people to benefit his oil buddies.
-
Why fill the SPR faster when the price goes up?
Bush said the SPR was being filled at 67,000 barrels per day. True for April, but he didn't mention that the plan for May is to nearly double that rate. The SPR charter calls for managing the fill rate so as not to affect price. So why fill faster when oil seems to be on an upward trend? I think it should be filled at a level dollar rate.
-
Uh, then what about ANWAR
Bush spent a few minutes bashing Congress over ANWAR, but from Wikipedia:
"The U.S. consumes about 20 million barrels (3,200,000 m³) daily. If the Arctic National Wildlife Refuge oil reserves were used to supply 5% of the U.S. daily consumption -- most is imported from Canada (19%), Mexico (15%), Saudi Arabia (11.5%), Nigeria (10.5%) and Venezuela (10.5%)[12] -- the reserves, using the low figure of 4.3 billion barrels (680,000,000 m³), would last approximately 4300 days, or almost 12 years. Using the high estimate, the reserves would last approximately 11800 days, or 32 years. If the Arctic National Wildlife Refuge was used to meet 100% of U.S. demand, it would last for 215 days under the low estimate, and 525 days or just 1.4 years if it contained 10.4 billion barrels (1,650,000,000 m³)."
Lessee, 5% of 20 million is 100,000 barrels, or only slightly more than what is put in the strategic reserve. Now what's the difference?
-
A different kind of tank?
to buy oil at these prices, when the reserve is already 95% full, is that there are plans to use that oil in a different sort of tank. (or the oil isn't there and he has to balance the ledger before he leaves office)
the line between government storage and enterprise, or private storage is sufficently blurred to cause a reasonable person to question what is happening.
-
Invest in Inertia
From a perspective of ruthless objectivity, I'd suggest that the notion of the SPR in general is just a nation-state's attempt to add inertia to a global commodity market.
Let's have more of that. That's something I'm actually content to pay taxes for. Let's be sure to encourage Germany to make a similar investment.
(Fill it, or at least have the futures to guarantee it being filled by tomorrow at 6am. ;)
-
Another Source
Marketplace also did a good analysis of President Bush's comments on the price of oil today: http://marketplace.publicradio.org/display/web/2008/04/29/bush_moon_q/
-
yr a weird buddhist
A buddha lover with 'little patience' for the truth. Hmmm.
His name is either Hotei or Budai. He's not 'the' buddha, any more than Mary is Jesus. Deal.
-
MarketPlace botched it
Actually I was yelling at my radio when that MarketPlace segment played. As usual they discussed supply and demand completely avoiding the obvious: supply is meeting demand because prices are high enough. People who try to analyze demand separately are just kidding themselves.
I end up listening to MarketPlace quite a bit on the way home, and I believe you have to be pretty ill informed to get anything out of it most of the time.