Rising US oil prices blamed on reserves policy

[charrison]

linkage

Two US senators have accused the Bush administration of driving up already high oil prices by its policy of filling up the country's strategic oil reserves.


Carl Levin, a Democrat from Michigan, and Susan Collins, a Republican from Maine, wrote a letter at the weekend urging Spencer Abraham, the energy secretary, to suspend plans to fill up the Strategic Petroleum Reserve (SPR) to "help provide American consumers and businesses with urgently needed relief from near-record high crude oil and energy prices".

With oil prices in the mid $30-range and commercial stockpiles at record lows, high petrol prices this summer could become a factor in President George W. Bush's re-election.

The two senators argue that filling the SPR at such high oil prices costs taxpayers "hundreds of millions of dollars" and that, according to the Air Transport Association, it adds up to $6 a barrel, or nearly 20 per cent, to the US oil price. The letter also quotes the economist Philip Verleger as estimating the extra cost at $8.

Other economists are less certain that the policy is having such a strong affect on oil prices.

Filling SPR seems like a good thing.

 

[koryo]

I agree, but politicians need to talk about something, so I guess this will have to do.

 

[EagleKeeper]

Most any pol can find a statistic that will support an argument in their favor.

 

[Spencer278]

Why wasn't the SPR full already?

 

[heartsurgeon]

what a bunch of liberal drivel...
oil prices are up because OPEC raised oil prices......, and it is winter in most of the world where the largest amount of oil is consumed...

what part of this "mysterious" conspiracy don' these loonie toon Democrats get?
consumption up, because it's COLD outside.
OPEC raises prices...

gosh, oil ends up costing more...go figure..

 

[BugsBunny1078]

All I know is we have conquered Iraq and we should have plenty of oil now yet the price of gas is higher than anytime in history. Someone is getting some free oil out of this and still raising the price of gas.

 

[smashp]

the combination of Opec cutting production to raise prices is Because of the Greater Demand in the market for oil.

Part of this increased demand is due to winter in the northern hemispere, but the Us building the strategic reserves up increases Demand.

under Clinton, He released the reserves to create greater supply to drive down the cost of heating oil for the poor. It affected our gas prices. Remeber that time not too long ago of less than a dollar for a gallon of gas?

 

[charrison]

Originally posted by: Spencer278
Why wasn't the SPR full already?

The last admin sold the oil to keep gas prices low.

 

[dmcowen674]

I say we go in and take over Saudia Arabia, those SOB Dictators are holding OUR Oil Hostage. :|

 

[DealMonkey]

Yeah! I want my cheep cheep Iraqi oil dammit! Bush promised and I'll be damned if I have to pay more than $2/gallon. What a rip.

 

[XZeroII]

Originally posted by: dmcowen674
I say we go in and take over Saudia Arabia, those SOB Dictators are holding OUR Oil Hostage. :|

The Poor Sarcasm award for the day is awarded to you

 

[DealMonkey]

Only the U.S. would buy oil at over-inflated prices and dump it into a hole in the ground.

 

[charrison]

Originally posted by: DealMonkey
Only the U.S. would buy oil at over-inflated prices and dump it into a hole in the ground.

Call it a savings account. With the SPR, we could go 6 months without oil imports if we had too.

 

[SuperTool]

SPR needs to be filled at record prices? Maybe someone can explain this to me. For some reason in my household I wait for low prices or sales to stock up on something, not when prices are record high? What am I doing wrong here?

 

[Mill]

I agree with SuperTool here which is a very rare thing. We are friendly with South America and Mexico, and should have a decent relationship with Iraq and Kuwait for a good while. We should have been releasing the reserves while prices are high to keep our consumption here the same or up, and wait for OPEC to increase the supply before we refilled the reserves. A 6 month reserve of oil just doesn't make sense. Not only do we have the countries I mentioned earlier but Canada as well. In this world today I don't see us having to fall back on a 6 month reserve(which would really do what?). If we had to rely on 6 month reserves only the military would really be using it because the price would be WAY too high for the average American. We still have American oil fields as well so this seems fairly dumb for Bush to be doing this.

BTW, heartsurgeon, OPEC didn't raise the price. They CUT their exports and that of course makes the price rise because our consumption stays the same or rises. Luckily we've only had a few major arctic air masses or prices could be much higher. Refineries should be gearing up for Gas production right now and moving away from heating oil so prices might fall for gas, but OPEC is set to cut their production again in March so it is anyone's guess if prices will actually fall. Oil pricing is very hard to get a fix on in the long term(if it was easy then lots of people would be making a killing selling options on oil contracts). Short term is what the market responds to, and prices will rise over the next month after OPEC cuts production. Filling the SPR right now if beyond idiotic because OPEC is about to scale back production. We do NOT need the SPR to be filled right now at current prices and supply. I'm actually starting to think about voting against Bush, but not because of the War. I never had an issue with the War although I felt the bad intel and resulting "changing" of the reason we went there disturbing. I found the Patriot Act disturbing too, and Bush trying to ban Gay marriage. Both are issues I'm not going to get too pissed off about, but making stupid economic decisions do bother me. Bush has yet to say how he is going to create jobs and he is making a foolish step in trying to feel the SPR right now. That's just my opinion of it so feel free to call me a Liberal even though I've typically voted Republican all my life. One other thing... the TSA wasn't needed either.

 

[GrGr]

The weak dollar is another problem for OPEC and may force them to raise the price just to compensate for the loss in revenue as the dollar falls further.

 

[dmcowen674]

Originally posted by: GrGr
The weak dollar is another problem for OPEC and may force them to raise the price just to compensate for the loss in revenue as the dollar falls further.

Old News, they already have.

It was already show in last meetings they raised the price of "Their" range they want to hae the price at the "Upper" end of the range to compensate for the weak dollar.

You can find this all in the Oil thread with the relevant links no one bothers to read.

 

[lozina]

More rantings from a helpless partisan zealot.

Originally posted by: heartsurgeon
what a bunch of liberal drivel...
oil prices are up because OPEC raised oil prices......, and it is winter in most of the world where the largest amount of oil is consumed...

what part of this "mysterious" conspiracy don' these loonie toon Democrats get?
consumption up, because it's COLD outside.
OPEC raises prices...

gosh, oil ends up costing more...go figure..

Carl Levin, a Democrat from Michigan, and Susan Collins, a Republican from Maine, wrote a letter at the weekend urging Spencer Abraham...

 

[outriding]

Spencer Abraham is a flaming idiot.

The only reason he is in there is because a republican lost his job and bush felt sorry for him.