(The above title is from the Ipad edition this morning–KSH).
What’s the emergency, you ask? The White House says that military operations in Libya have disrupted supply. But Libya’s oil has been shut in for months now, and oil prices are down from their highs this year. So on Thursday Obama administration spokesman Jay Carney argued that oil demand is likely to rise over the summer. In other words: It’s vacation season, and the White House is worried about high prices through the summer driving months.
Therein, perhaps, is a political emergency, at least in the White House view: President Obama’s reelection prospects will be harmed if national discontent over high gasoline prices continues….
Whatever the rationale, it is a bad idea.
Oil is bad: per the WaPo [i]Americans have enjoyed cheap gas for decades — underpriced when you consider the many social costs, such as air pollution, climate change and the enrichment of hostile foreign regimes, that the country’s dependence exacts[/i]
That is the “glass half-empty” view. How about the “glass half-full view”, that markets have priced oil and its downstream products at the value they deliver to society; mobility, freedom of choice, streams of innovative products such as plastics which have displaced less useful, less efficient materials, and pharmaceuticals which have helped to dramatically extend life spans and improve the quality of those lives. Not to mention chemicals to grow more bountiful yields of crops with better presevation technology to deliver better quality food to more people than ever.
I have to admit that I am baffled as to the logic of releasing 30 million barrels from the strategic oil reserve now. The price of gas is already on the decline, so I find this to be a poor decision that will lead to another oil price bubble once the reserves hit the market and are used up.
On second thought, I guess I do understand the logic of trying to ingratiate oneself to the public, which if that’s the only motive, I find it completely distasteful.
I would be more sympathetic to this analysis if the International Energy Agency were not doing the same thing for the same stated reason. If one can criticize the President for something, let it be for leading from behind on this and not doing something like it 6 months ago when speculation was spiking prices. If it is purely political why now and not last fall or next spring when it would have much greater impact? If it is purely political why is the international community doing the same thing?
Supply and demand have nothing to do with the oil market which has been subjected from the beginning to market manipulations and the predations of speculators. Jim Cramer thinks the President did the right thing to drive the speculators from the market. Ultimately, though, OPEC and the speculators will be back to the same old game, and the major oil corporations will continue to post record profits.
#4–I bet he hasn’t driven George Soros from the oil markets. This is vintage Obama. The price of oil is droppoing anyway, so he releases a pittance into the market and then wilkl try to take credit for dropping gas prices. He thinks we are stupid. If he really cared he’d get Eric Holder off of trying terrorists in New York and Kentucky and turn the Justice Department loose on oil speculation. He could also direct the Secretary of the Interior to start issuing drilling permits. He will do neither.