just pick a new benchmark index, if this one gets skewed by the strategic reserve demand fall? Are there no others than the West Texas market that might be used?

No.

Americans consume oil at such a rate irrespective of price that nothing short of finding billions and billions of easily recoverable sweet crude (which would actually be a disaster vis-a-vis global warming) and an instant 5% reduction in consumption world wide would lower the price of oil. As neither of these things is likely to happen, I don't believe we will ever again see oil below $100/barrel.

70,000 bbl/da may be miniscule on the world market, "light sweet crude" notwithstanding. But it amounts to over $7 million a day in Federal expenditures, all going down the old rat hole.

If the SPR is currently "97% full", what's the point in adding more? Particularly at these prices, with these presumed shortages?

...Other than continued big profits for oil-producing Bush cronies, that is.

The sooner oil costs five bucks a gallon the better off we will all be. Giant SUV's will die in rust heaps. Locally grown produce will suddenly be cheaper than the part petroleum crap grown god knows where. People will be forced to use their bodies for transportation. Sure it will be painful, but with great reward. Of course the super rich will try to maintain their current standards by hoarding available stocks, but they too will eventually seem quaint and outdated and eventually they will be disposed of, just like the rusting SUV's.

The sooner oil costs five bucks a gallon the better off we will all be. Giant SUV's will die in rust heaps.

And what about people in suburbs with little or no public transportation who drive mid-size sedans to get to work?

Locally grown produce will suddenly be cheaper than the part petroleum crap grown god knows where.

I don't see how that works. It will just cost the same as it does now, and the transported produce will cost more.

People will be forced to use their bodies for transportation. Sure it will be painful, but with great reward.

Sure, let's just bike to work for 10 miles through the woods along the Garden State Parkway.

Your post is a prime example of why the "city liberals are out of touch with working folk" drum gets so much beating. I lived in NJ, which actually has a better public transportation system than most states, and everyone I know still found it impossible to get anywhere regularly without a car. Driving is a reality and necessity for the majority of people who live outside the 5 or so major cities. The sooner you can understand that the better.

. I lived in NJ, which actually has a better public transportation system than most states, and everyone I know still found it impossible to get anywhere regularly without a car. Driving is a reality and necessity for the majority of people who live outside the 5 or so major cities. The sooner you can understand that the better.

OK, but how do we get out of the "We can't do it today" trap? I also live in NJ, and I see us making the problem worse every day.

We're never going to get out of this hole if all we ever do is dig it deeper. What do you recommend as a first step toward a world that can operate without huge amounts of cheap oil?

Why are we assuming that a pure speculative impulse is the only reason for the high price of oil futures? Many buyers on the futures market may be major fuel consumers (like airlines) anticipating that today's prices are be the best they can get for tomorrow's consumption.

Those buyers won't care if the strategic reserve becomes available -- they have a budget for oil futures and they'll spend it on whatever is available, because they know they're going to need it.

Isn't refining capacity, or lack of it, the major driver of gasolene prices in the US right now? And if that's true, what is the real effect of lowering crude prices?

If thats true cutting off additions to the strategic reserve isn't going to lower gas prices much, but it is going to lower the operating costs of US refineries, raising their profit margines. Cui bono?

As a matter of public policy telegraphing your intentions to manipulate the oil market will only invite the middle men to step in front of the consumer with price increases; truckers, freight lines, just about everybody. The effect to the economy might actually be a net negative for consumers.

That's an important point about thin markets in commodities, which set the price, but cannot make delivery. That's fundamentally flawed, but it happens increasingly in global markets where off market trading between countries occurs, changes in the benchmark currency, and other political matters make these markets less representative.

The war on terror/drugs/political enemies, is often fought in the computer databases that conduct international banking transactions. Freezing and confiscating accounts is one way the US destroys confidence in global markets. Another is through a weak dollar policy.

At the bottom, according to Bob Prechter, it only takes one buyer and one seller to destroy the value in any market, housing or oil. The official government policy is to see that that one transaction always takes place at what is considered a fair price. (In the final outcome they can control housing if they prevent lower income housing from trading, even if only one McMansion trades, that becomes the benchmark.

Of course it all gets ridiculous after a point, and buyers and sellers know the real score, which is why oil is still going up despite the rally in the dollar.

I live in Portland, Oregon. If that's one of the 5 major cities then the last census short of by about 7 million people. You don't need a car here to get to work. We did it. Stop whining and figure out how to do it where you live.

The only way I can feel ok when I get up in the morning is to smoke cigarettes. Sure they make me cough and hack, but if I don't smoke them I get cranky and I eat too much and get fat. So the only solution for me to get through my day is to keep smoking as many cigarettes as I can. I have heard rumours that my cigarettes will eventually kill me but that's waaaay off in the future, and If I don't smoke cigarettes I feel bad right now. Smoking cigarettes is definitely the right thing to do, and all of the alternatives are just unbearable so piss off all you anti-smoking fascists!