Strategic Petroleum Reserve

[N_Jay]

Now some politicians are talking about using the Strategic Petroleum Reserve to try to fix prices!!!

1) it was not and is not intended to be used for market influence.
2) it is not the job of the government to become a player in any market
3) It will not have significant effect if any
4) if there is a disruption due to war, terrorism, accident, or natural disaster depletion of the reserve will prevent it from fulfilling its proper purpose.

I don't get activist often, but if you care to, PLEASE write your newspaper and politicians and let them know how stupid and DANGEROUS this action would be!

(Hope this not "too" off-topic" or "too" current events, since it does have to do with oil)

P.S. I even depoliticised it from how I originally posted it on another forum

[robrecht]

IIRC George Bush Senior deftly used the SPR to stabilize the oil market during the first Iraq War but of course he was only planning on a short war so the situation is no longer comparable. Regardless, the very creation and current expansion of the SPR affects the market and arose from economic and market conditions created by OPEC during the first oil crisis. Of course, I'm not arguing for obviously ineffective measures to avoid dealing with the larger issues, but I do think there are indeed better geopolitical approaches to this issue, which of course I will not go into here since I don't see how you will be able to keep this thread within the nonpolitical parameters desired here. But good luck trying!

[bigdadi]

The COMMODITY price will go south as soon as the NEWS is out. You don't have to do it in ACTION. What it needs is just a LITTLE ACTION and this can be stopped anytime. You really don't have to empty the reserve, just a gesture.

[N_Jay]

Originally posted by robrecht
IIRC George Bush Senior deftly used the SPR to stabilize the oil market during the first Iraq War but of course he was only planning on a short war so the situation is no longer comparable. Regardless, the very creation and current expansion of the SPR affects the market and arose from economic and market conditions created by OPEC during the first oil crisis. Of course, I'm not arguing for obviously ineffective measures to avoid dealing with the larger issues, but I do think there are indeed better geopolitical approaches to this issue, which of course I will not go into here since I don't see how you will be able to keep this thread within the nonpolitical parameters desired here. But good luck trying!

Yes, maybe it should have been used STRATEGICALLY at the beginning of the war to adjust for the (relatively) short term disruption anticipated.

That is a LOT different from what is being called for by the talking heads today.

Time will only tell if we can keep this non-partisan.

[N_Jay]

Originally posted by bigdadi
The COMMODITY price will go south as soon as the NEWS is out. You don't have to do it in ACTION. What it needs is just a LITTLE ACTION and this can be stopped anytime. You really don't have to empty the reserve, just a gesture.

You think so?

It reacted very little to when we stopped buying oil for the SPR.

What indication do you have?

If (when) the little action does not work, when do you call it quits?

Even if the Little action does work, when happens when you stop the action?

[rockman19762001]

Two important events will happen by the end of September. One the Olympics will be over, and the election cycle will end in India. It is believed by many that after these take place, both countries will stop subsidizing the price of gasoline and diesel within in their borders. Once this happens the crazy no holds bar consumption of oil by both countries will dry up and drive down the price of oil. This is the only thing that is going to drop the price of oil, slow the consumption by China and India.

[jdeanski]

Originally posted by rockman19762001
Two important events will happen by the end of September. One the Olympics will be over, and the election cycle will end in India. It is believed by many that after these take place, both countries will stop subsidizing the price of gasoline and diesel within in their borders. Once this happens the crazy no holds bar consumption of oil by both countries will dry up and drive down the price of oil. This is the only thing that is going to drop the price of oil, slow the consumption by China and India.

Very interesting insight.

[robrecht]

I'm a little skeptical, but sure hope it's true--here's some more details:

http://articles.latimes.com/2008/jun...chinagasoline9

BTW, I was just reading an article that said that the '73 OPEC embargo effectively raised the price of oil by less than $3 a barrel to a whopping $8/barrel. Not sure of that time frame for those numbers since it continued rising higher into 1974, etc. Wikipedia shows the price increasing from around $3/barrel to $15ish over 2-3 years and leveling off. I was too young and unaware to remember these details but it's pretty amazing, isn't it?

[N_Jay]

Originally posted by robrecht
I'm a little skeptical, but sure hope it's true--here's some more details:

http://articles.latimes.com/2008/jun...chinagasoline9

Interesting stuff.

I hope this does happen, because it will help our economy a good bit.

Originally posted by robrecht
BTW, I was just reading an article that said that the '73 OPEC embargo effectively raised the price of oil by less than $3 a barrel to a whopping $8/barrel. Not sure of that time frame for those numbers since it continued rising higher into 1974, etc. Wikipedia shows the price increasing from around $3/barrel to $15ish over 2-3 years and leveling off. I was too young and unaware to remember these details but it's pretty amazing, isn't it?

Yep.
Isn't it interesting what a little historical perspective does to the "Sky is falling", "Gloom and Doom" proponents of today.

I saw some "Democratic Strategist" on TV this morning saying we were in the "worst economic times ever!".

I thought the rest of the panel was going to fall off their chairs.

[jay]

Originally posted by N_Jay

...

I saw some "Democratic Strategist" on TV this morning saying we were in the "worst economic times ever!".

....

The Starbucks that's on his way to the office is probably slated to close.

[robrecht]

Originally posted by N_Jay
Time will only tell if we can keep this non-partisan.

[N_Jay]

Originally posted by robrecht

I was not being partisan. That was the title under her name.

Since it did not say; "Renowned Economist", or "Noted Lecturer",. I had no other title to apply.

[robrecht]

Originally posted by N_Jay


I was not being partisan. That was the title under her name.

Since it did not say; "Renowned Economist", or "Noted Lecturer",. I had no other title to apply.

Democratic strategists try to exaggerate how bad things are to try and win presidential power and Republican strategists (eg, Phil Gramm) minimize how bad they are or even promote how strong the economy is in an effort to maintain presidential power. And much of the media only looks at economic and other issues through these biased and partisan political perspectives with these huge conflicts of interest warping any genuine attempts at analysis and understanding.

I resisted the temptation to contribute to your Phil Gramm thread because I figured it was inevitably partisan. It's just too easy to ridicule the projected attempts at analysis from either partisan political perspective. And maybe too hard to do so without adopting, promoting, or baiting the polar partisan political perspectives.

Good luck in avoiding current political punditry, but even both sides of the current political debate completely ignore the larger geopolitical issue behind the very creation of the SPR.

[N_Jay]

Originally posted by robrecht
. . . Republican strategists (eg, Phil Gramm) minimize how bad they are or even promote how strong the economy is in an effort to maintain presidential power. . . .

Did you read Phil Gramm's statements? Do you think he was exaggerating or minimizing any of the issues?

Originally posted by robrecht
. . .but even both sides of the current political debate completely ignore the larger geopolitical issue behind the very creation of the SPR.

While it was a cold war creation, I believe it is still quite strategic in today's world. Maybe more so as our society has become even more sensitive to fuel disruptions regardless of cause.

Too bad it is not as easy to store refined product as disruption of refinery capacity has become almost as big an issue.

Either way, I don't think we should use it in attempts at price adjustment as long as the market is operating.

I would be interested in hearing your view, as you are (usually) one of the less emotional and more thoughtful people here.

[robrecht]

Originally posted by N_Jay

Did you read Phil Gramm's statements? Do you think he was exaggerating or minimizing any of the issues?

While it was a cold war creation, I believe it is still quite strategic in today's world. Maybe more so as our society has become even more sensitive to fuel disruptions regardless of cause.

Too bad it is not as easy to store refined product as disruption of refinery capacity has become almost as big an issue.

Either way, I don't think we should use it in attempts at price adjustment as long as the market is operating.

I would be interested in hearing your view, as you are (usually) one of the less emotional and more thoughtful people here.

As I said, I don't think I'm gonna discuss Phil Gramm's statement because I think such a discussion would be inevitably partisan.

The SPR is, of course, strategic, but it's still defensive and minimalist and does not attempt to address the primary geopolitical issue. IIRC, the OPEC embargo of 1973, was not primarily a cold war phenomenon but rather the rise of economic empowerment against Western supporters of Israel. Economic war, if you will.