Congress defies Bush on oil reserve

[Gunny]

WASHINGTON (CNN) -- The House of Representatives voted to direct the Bush administration to stop filling the strategic petroleum reserve temporarily in an effort to alleviate increasing gas prices.

Both the House and Senate, which voted earlier Tuesday, exceeded the two-thirds vote required to override the president's expected veto: The House vote was 385-25, the Senate vote was 97-1.

President Bush opposes the reserve measure because, he said, limiting supplies to the reserve could have national security consequences in the event of a natural disaster or terrorist attack.

He has also argued that the daily amount of oil put into the reserve pales in comparison to worldwide consumption and therefore would have a negligible impact on the price at the pump.

"Purchases for SPR [the reserve] account for one-tenth of 1 percent of global demand," Bush said in April. "And I don't think that's going to affect price when you affect one-tenth of 1 percent, and I do believe it is in our national interests to get the SPR filled in case there's a major disruption of crude oil around the world." Watch how high gas prices are affecting the economy »

Since the two measures came to vote in different formats -- the Senate voted on an amendment while the House had a stand-alone bill -- lawmakers will have to merge the two and approve them again. Senate Majority Leader Harry Reid, a Nevada Democrat, said he hoped that would happen as early as next week.

http://www.cnn.com/2008/POLITICS/05/13/congress.oil/index.html

Now how is this any dumber than suspending the Federal tax on gas? One tenth of 1%. Oh yippee ...

 

[Care4all]

Now how is this any dumber than suspending the Federal tax on gas? One tenth of 1%. Oh yippee ...

well, that coupled with China's massive earthquake in a zone where usa producing factories are, let alone the 10,000's of factory workers killed and their country being tied up with their natural disaster, with the lowering of our demand which has taken place, along with the ethanol making it out there which also has reduced our demand, then adding the demand reduction by not buying the strategic reserves....all done together .... might actually work gunny? Better than a gas tax reduction alone, that's for certain!!!!



care

 

[RetiredGySgt]

well, that coupled with China's massive earthquake in a zone where usa producing factories are, let alone the 10,000's of factory workers killed and their country being tied up with their natural disaster, with the lowering of our demand which has taken place, along with the ethanol making it out there which also has reduced our demand, then adding the demand reduction by not buying the strategic reserves....all done together .... might actually work gunny? Better than a gas tax reduction alone, that's for certain!!!!



care

Lots of if's there.

 

[ReillyT]

Now how is this any dumber than suspending the Federal tax on gas? One tenth of 1%. Oh yippee ...

I have to agree. This seems like a show. What really is the point?

 

[onedomino]

Instead of pointless public relations stunts Congress should remove the impediments to developing the nation's 1.7 trillion barrels of oil in the Colorado shale. It could also provide incentives to develop North Plains coal gasification.

 

[Care4all]

Wonder why releasing the strategic oil reserves worked under President Clinton? I realize that was probably alot more put on to the market than just barrels of oil we are not buying and perhaps this is why it worked at the time....

Oil is so sensitive now, someone sneezes and the speculators raise the price...buying less, reducing demand... like we are in the usa now, they STILL raise the price.....

so, who really knows nowadays what the heck will happen?


The speculators obviously do not take our present demand in to consideration.

I read recently that Saudi Arabia has been lying about their oil reserves...they have told the world they have 230 billion in oil reserves but the rumor is that they over inflated their reserves by 100 billion barrels, that they only really have 130 billion barrels of oil in reserve....

Maybe the speculators found out about this lie, and this is why prices have escalated beyond any reason that is out in the public and known...and I mean beyond the dollar deflation and present demand? Maybe this is why we really did go in to Iraq, who has the second largest oil reserve next to saudi arabia, but if the Saudis are lying then Iraq really has the largest oil reserve....and NO, NOT TO STEAL THE OIL, but to strategically position ourselves to be paying recipiants of the Iraq oil reserves?

Again, who the heck knows????

care

 

[RetiredGySgt]

Wonder why releasing the strategic oil reserves worked under President Clinton? I realize that was probably alot more put on to the market than just barrels of oil we are not buying and perhaps this is why it worked at the time....

Oil is so sensitive now, someone sneezes and the speculators raise the price...buying less, reducing demand... like we are in the usa now, they STILL raise the price.....

so, who really knows nowadays what the heck will happen?


The speculators obviously do not take our present demand in to consideration.

I read recently that Saudi Arabia has been lying about their oil reserves...they have told the world they have 230 billion in oil reserves but the rumor is that they over inflated their reserves by 100 billion barrels, that they only really have 130 billion barrels of oil in reserve....

Maybe the speculators found out about this lie, and this is why prices have escalated beyond any reason that is out in the public and known...and I mean beyond the dollar deflation and present demand? Maybe this is why we really did go in to Iraq, who has the second largest oil reserve next to saudi arabia, but if the Saudis are lying then Iraq really has the largest oil reserve....and NO, NOT TO STEAL THE OIL, but to strategically position ourselves to be paying recipiants of the Iraq oil reserves?

Again, who the heck knows????

care

They are not releasing oil from the reserve, they are not filling as they are required if this passes.

 

[AllieBaba]

So stupid to expect oil prices to drop when one refuses to build refineries or drill.

So stupid.

 

[Care4all]

They are not releasing oil from the reserve, they are not filling as they are required if this passes.

yes, I SAID THAT...retsgt...


second sentence i wrote...

I realize that (this)was probably alot more put on to the market than just barrels of oil we are not (planning on) buying and perhaps this is why it worked at the time....

 

[Care4all]

So stupid to expect oil prices to drop when one refuses to build refineries or drill.

So stupid.

if we drilled in Alaska, it makes no difference to the price of global oil....because it is not Nationalized and is on a global market and this oil would be put on to that market and priced accordingly.

There have been some MEGA FINDS of oil within the last five years in the Gulf of Mexico by the Mexicans, and some HUGE PROGRESS with tons of oil in Canada that newer technology has allowed them to benefit from too, and huge finds in the Caspean sea, and several MEGA finds of oil throughout the world in which ANWR pales in comparison BUT the price of oil KEEPS RISING.

ANWR will not reduce the price of oil on the global market that our oil is put in to for pricing purposes by our oil companies....seems like it should, as with all of the other mega finds of oil that have come up, but the facts show that oil hasn't budged in the downward's direction with these finds.

care

 

[doeton]

in regards to the economics of it...the argument against the gas holiday was that supply is static in the short term...prices only fluctuate to the point that demand equals supply...

thus with the holiday the price would go up to reduce demand to the point it equals supply.

whilst not buying oil on the mega scale that the government was buying will actually increase supply and hence lower the price.

gotta love econ...basically it possible to explain anything to suit the wanted outcome.

what i wonder is why are we filling the reserves in the first place? and/or rather when were the depleted?

one might ask why should be increasing the reserves with prices at a record highs?

i mean hello...seems like a bad time just given the prices if anything...but hey guess i'm just a fiscal conservative.

 

[Zoomie1980]

Wonder why releasing the strategic oil reserves worked under President Clinton? I realize that was probably alot more put on to the market than just barrels of oil we are not buying and perhaps this is why it worked at the time....

Oil is so sensitive now, someone sneezes and the speculators raise the price...buying less, reducing demand... like we are in the usa now, they STILL raise the price.....

so, who really knows nowadays what the heck will happen?


The speculators obviously do not take our present demand in to consideration.

I read recently that Saudi Arabia has been lying about their oil reserves...they have told the world they have 230 billion in oil reserves but the rumor is that they over inflated their reserves by 100 billion barrels, that they only really have 130 billion barrels of oil in reserve....

Maybe the speculators found out about this lie, and this is why prices have escalated beyond any reason that is out in the public and known...and I mean beyond the dollar deflation and present demand? Maybe this is why we really did go in to Iraq, who has the second largest oil reserve next to saudi arabia, but if the Saudis are lying then Iraq really has the largest oil reserve....and NO, NOT TO STEAL THE OIL, but to strategically position ourselves to be paying recipiants of the Iraq oil reserves?

Again, who the heck knows????

care

At some point there will reach a speculation "tipping point" at which speculators will just dump the entity, whatever it is. Happened with houses, happened with .com stocks 10 years ago. Happened the last time we had a major oil spike in the late 70's. Even the chairman of Exxon agreed this morning on Today, claiming once speculators find the next "hot thing", oil may crash hard....

Actual demand is FALLING, not rising now while supply is so far stable at about 1.5M barrels/day MORE than demand, up from 1M six months ago. And most countries have also been filling strategic reserves and most are almost at 100% capacity. In the US alone, no one can sell an SUV and hybrids and sub compacts can't be built fast enough....Americans are slowly undergoing a fundamental change in habits much as they did in the early 1980's...when fuel economy was the number one issue in buying a new car.

Tempering that a bit is that in 1980 we still believed there were large, untapped reserves left and we had a lot excess pumping capacity. We have neither today. So no $20 oil but we certainly could see $50-60 oil again....

 

[Zoomie1980]

if we drilled in Alaska, it makes no difference to the price of global oil....because it is not Nationalized and is on a global market and this oil would be put on to that market and priced accordingly.

There have been some MEGA FINDS of oil within the last five years in the Gulf of Mexico by the Mexicans, and some HUGE PROGRESS with tons of oil in Canada that newer technology has allowed them to benefit from too, and huge finds in the Caspean sea, and several MEGA finds of oil throughout the world in which ANWR pales in comparison BUT the price of oil KEEPS RISING.

ANWR will not reduce the price of oil on the global market that our oil is put in to for pricing purposes by our oil companies....seems like it should, as with all of the other mega finds of oil that have come up, but the facts show that oil hasn't budged in the downward's direction with these finds.

care

It rises because of SPECULATION. The demand is SPECULATIVE demand. Speculators want to buy more futures contracts than there are contract available for sale! Prices rise. There is NO SHORTAGE of oil today. We still produce a MORE than we consume. But there is only a small margin of error as we are pumping at capacity and have no way to make up for a major outage somewhere because of natural disaster or war. And that drives speculative BUYING, betting on any disaster and then making even minor disruptions SEEM major. These oil speculators were buying houses, equities and mortgage backed securities several years ago. Before that they were buying tech and internet stocks. Tomorrow they will running up something else....probably stocks again...

 

[Zoomie1980]

in regards to the economics of it...the argument against the gas holiday was that supply is static in the short term...prices only fluctuate to the point that demand equals supply...

thus with the holiday the price would go up to reduce demand to the point it equals supply.

whilst not buying oil on the mega scale that the government was buying will actually increase supply and hence lower the price.

gotta love econ...basically it possible to explain anything to suit the wanted outcome.

what i wonder is why are we filling the reserves in the first place? and/or rather when were the depleted?

one might ask why should be increasing the reserves with prices at a record highs?

i mean hello...seems like a bad time just given the prices if anything...but hey guess i'm just a fiscal conservative.

Oil prices today have very little to do with REAL supply-demand curves. Oil has not traded based on mostly supply-demand in over five years. Five years ago, there was very little speculation in the oil markets compared to today. Most futures were sold to shippers and producers and refiners to leverage outstanding actual purchase and delivery contracts...in otherwords LEGITIMATE business use of the market, to protect a businessman's "basis". That's how commodity markets normally function....to protect long or short positions in the REAL commodity and are usually traded WITHIN the business.

But once a commodity becomes a speculative target it ceases to obey the pressures of demand and supply and becomes a psychological game. Today, MOOD and FEAR drive the market because of a historical SPECULATIVE pressure on the market.

The price of the dollar is also having a big impact.

 

[Gunny]

well, that coupled with China's massive earthquake in a zone where usa producing factories are, let alone the 10,000's of factory workers killed and their country being tied up with their natural disaster, with the lowering of our demand which has taken place, along with the ethanol making it out there which also has reduced our demand, then adding the demand reduction by not buying the strategic reserves....all done together .... might actually work gunny? Better than a gas tax reduction alone, that's for certain!!!!



care

Huh?

 

[Care4all]

Huh?

hahahahahaha! you're asking me that now? i dunno what i meant? that was 2 days ago when i wrote it....where were you then? lol i probably could have answered you somewhat intelligently back then.....? or maybe not?

care

 

[Toro]

I agree with this.

First, Clinton would periodically suspend purchases of the SPR. I believe he even released some oil into the market from time to time. I remember it having an effect, albeit a modest one.

Second, with 700mm barrels, the SPR has plenty of oil. WTI at $127 is unsustainable. A time will come where it will be cheaper to buy oil.

 

[Zoomie1980]

I agree with this.

First, Clinton would periodically suspend purchases of the SPR. I believe he even released some oil into the market from time to time. I remember it having an effect, albeit a modest one.

Second, with 700mm barrels, the SPR has plenty of oil. WTI at $127 is unsustainable. A time will come where it will be cheaper to buy oil.

Exxon Chairman thinks once speculators get tired of oil, it may "crash" ala early 1980's. A "crash" means $70 is possible. One thing about speculation, there's just as much money to make on a crashing market as on a rising market as they sell everything short.... When it crashes it may be as extreme as the spike. We already starting to see that in some housing markets where overpriced homes are now quickly passing through the under priced barrier...