Saturday, March 17, 2012

Obama Responsible For Gas Prices

The proof is in the pudding. President Obama, aka Oilbama, and the Democrats are responsible for rising gas prices. Despite articles from touting "More Drilling Won't Lower Gas Prices" and "It's Not Obama's fault that Crude Oil Prices Have Increased" there is now admission that oil supply and production via government policy does matter.
How obvious is it that oil prices, set on a world market, are all but impervious to government policies? So obvious that even Rupert Murdoch’s WSJ and the Koch-fueled Cato Institute feel compelled to make the case.
 Well, it is not obvious as Reuters is reporting that "U.S., Britain set to agree on emergency oil stocks release."

(Reuters) - Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.
A government policy of releasing supply from the strategic petroleum reserve MUST affect world market prices. There is no reason for the Obama administration, the British government or previous U.S. administrations to release the oil reserves without such an effect. Supply does matter.

Reuters continues:

While there is no significant disruption of world oil supplies at the moment, sanctions on Iran are expected to cut its output when a European Union embargo takes effect from July.
Minor stoppages from South Sudan, Yemen and Syria also have contributed to the rise in oil prices.
"At the moment there is no need to use it," IEA executive director Maria van der Hoeven said of reserves at an industry conference in Kuwait on Wednesday.
"There is more supply coming to the market from OPEC countries. There is no price trigger for the stocks release, the trigger is a disruption in physical supplies."
"There is no real supply disruption, this is just price management", said Olivier Jakob from Vienna-based consultancy Petromatrix
While the U.S. release would be of crude oil from the national SPR, the UK contribution is likely to come from a reduction of the minimum reserves of crude and refined products that UK commercial oil companies are required to hold.
The United States has sold crude oil directly from the 700-million barrel SPR only a handful of times, almost always in conjunction with the IEA.
In addition, the U.S. Department of Energy has arranged unilateral short-term loans from the reserve about a dozen times since it was filled in the 1980s, typically in much smaller amounts.
"Simple deduction, my dear Dr. Watson."

Hat tip: Fellow SLOB Lipstick Underground

More Information

W.C Varones "Obama to plunder Strategic Petroleum Reserve to boost re-election" observes:
Gee, that would create a temporary dip in gas prices right around... oh, what's happening this fall anyway? has more detail on "How the Strategic Petroleum Reserve Affect Gas Prices"

The U.S. House of Representatives: "Obama Administration Spins U.S. Oil Production Numbers, Takes Credit for Predecessors’ Pro-Energy Policies"

Enews: "Production on federal tracts fell in 2011"

Institute for Energy Research: "IER Analysis: Oil and Gas Production Declines on Federal Lands in FY2011


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