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August 10, 2004

Pressure Increases for Bush to Tap the Reserve

Even those who had previously objected to tapping the Strategic Petroleum Reserve are now declaring "It's time."

Even if Bush doesn't want to tap the reserve, is it really necessary at this time to continue filling it? Can't that be delayed until prices moderate?

I half want him to tap it just to hear Joshua Micah Rosencrantz Guildenstern Marshall decry the "suspicious timing" of the move -- timing which would, I'm guessing, be even more suspicious than President Clinton's similar move in the late summer of 2000.

John Kerry will rip Bush for the "politically motivated decision" even as he, in the very next breath, takes credit for having suggested the idea a year ago (back when oil cost $35/bbl).

Meanwhile... Oil breaks the $45 mark on Mexico hurricane worries.

posted by Ace at 01:22 PM

Comments

I think he's filling the reserve because our friendlier, more constructive War on Terror may not work out and in that case we're going to need that oil. This is about covering our bets on regional reform to head off jihadi revolution. It's the smart move and John Kerry bein' on the other side is just another indication that he doesn't understand the magnitude of our "little terrorism problem."

No blood for oil? It might prove to be our only option.

Posted by: Kerry Is Unelectable on August 10, 2004 01:35 PM

Oil would have to reach $60 a barrel to meet the highs of the 70's. We have a long way to go before that. If we can keep the economy on track and get interest rates back up and do a few other things to strengthen the dollar all of this pressure will go away and prices will come back down. It remains to be seen if Greenspan can pull it off, but it's sure as hell fun watchin' him try.

Posted by: Kerry Is Unelectable on August 10, 2004 01:41 PM

Why Bush should keep the valve closed

Posted by: Nicholas Kronos on August 10, 2004 01:55 PM

As I recall from the commentary on Clinton's "brilliant" move to open the reserves, the amount of oil actually released to market would be economically insignificant anyway. Can anybody confirm or deny that?

Posted by: Smack on August 10, 2004 01:55 PM

Smack,

There was a guy on Brit Hume about a month ago who said (this surprised me) that Clinton's release of reserve oil actually had a fairly significant effect on prices. And an almost immediate effect, too.

And he wasn't a liberal partisan. He seemed like a genuine neutral expert, just relating the facts.

Posted by: ace on August 10, 2004 01:58 PM

I think the effect would be as much psychological as material. I'm ambivalent. If he does it, it will be "seen" as political. If he's going to do it, he should do it as part of a plan to put pressure on the speculators in the oil market. As long as China's and Japan's oil demand continues to increase, the problem is not going away. That's why I don't think there's much that really can be done except to open up the U.S. for further exploration along both the East and West coasts, Alaska, and the mountain west (Montana, Wyoming, N. Dakota).

Posted by: Laddy on August 10, 2004 02:50 PM

As I recall from the commentary on Clinton's "brilliant" move to open the reserves, the amount of oil actually released to market would be economically insignificant anyway

If memory serves me correctly, you are right. I think it's treated more along the lines of finding a whole new oil field. The potential for supply simply increases by the amount of our reserve. Prices adjust accordingly. IMO this would be a giant vote of no confidence in the Saudi's. More overt than we've already made - b/c this hits them where it hurts.

Posted by: fat kid on August 10, 2004 03:15 PM

Again, that was my intuitive guess, but an economist specializing in the oil market says it's not so.

He says tapping the reserve moves prices "significantly," whatever that word may mean. To me, I think it means 2-4 dollars per barrel.

Posted by: ace on August 11, 2004 01:35 AM

The amount of crude being purchased for the national oil reserve is negligable, and likely only pushing the price up a few cents. Further, opening the spigots on the reserve would likely only drop prices by a few cents. The size of the reserve relative to international supply & demand is laughable. Window dressing. The reason crude prices are so strong is because it's a speculatively traded commodity with, to quote a friend of mine, only three speeds: fast, faster, and boogie.

Posted by: Beck on August 11, 2004 05:49 AM

Did the economist explain why it would lower prices? Now I'm really curious about this...

Posted by: Smack on August 11, 2004 11:51 AM

Some current facts, for those interested:

As of today, the Petroleum Reserve contains 665.7 million barrels. During August it'll buy 3.36 million bbls to get closer to its max capacity of 727 million barrels.

The U.S. currently uses over 20 million bopd, of which the SPR's August purchases will average 0.11 million bopd. Thus the SPR's purchases amount to about one-half of one percent of total daily U.S. consumption.

In January of 1991, President Clinton ordered the SPR to sell 17 million barrels that month--a little more than five times what the SPR is buying today. That's quite a multiple--and prices did ease. However, so many factors influence world oil prices that it's hard to break out what action was responsible for how much of any change. But certainly, in the absence of major war a new source of oil equal to 3% of daily U.S. consumption (we used less oil 13 years ago) would be expected to reduce prices in the U.S.

--sf

Posted by: sf on August 11, 2004 04:42 PM

Obviously my fact-checker is on vacation: The "Jan '91" date was from the SPR's website, and was noted as a "Presidentially ordered release." Having just read the comments here that wondered about "Clinton's release", I was thinking Clinton, but obviously GHW Bush was president then.

Mea culpa.

Posted by: sf on August 11, 2004 04:48 PM

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"It's f**king f**ked."
-- reportedly a genuine comment offered by a "senior Labour source"
Correction: I wrote that Labour is losing 88% (now 87%) of the seats it is "defending." I think that's wrong. The right way to say it is the seats they are contesting -- that is, they don't necessarily already hold these seats, but they have put up a candidate to run for the seat. It's still very bad but not as bad as losing 87% of the seats they already held.

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@BasilTheGreat

🚨ED MILIBAND [a Minister in Starmer's government] SAYS KEIR STARMER WILL RESIGN AS PRIME MINISTER

He has reportedly reassured Labour MP's that Starmer will be resigning following the disastrous results tonight

It's over

"The end of the two party system in the UK" as first the Fake Conservatives and now Labour chooses political suicide rather than simply STOPPING THE INVASION
Incidentally, the only reason this didn't already happen in the US is because of the Very Bad Orange Man (who is right on 85% of all policy calls and extremely, existentially right on 15% of them)

No political party that is NOT also a doomsday religious cult would EVER choose a cataclysmic loss -- and possible extinction as a party -- to support a toxically unpopular favoritism of NON-CITIZEN ILLEGAL MIGRANTS over actual citizen voters.

Only a cult does this.

Now they've lost 84%.

Annunziata Rees-Mogg
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If this continues Labour loses 2,148 seats tonight.

That is much worse than the worst case predictions I’ve seen.

Cataclysmic

Update: They've now lost 88% of the seats they're defending. As I mentioned earlier, I think I heard that London will not bail them out, as many of those Labour seats will probably flip to "Muslim Independent" or Green. Detroit's 5am vote will not save them.

Yup, Labour is losing 80% of its seats...

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🚨 BREAKING: Labour have lost 80% of all seats contested as of 2:25 AM.<
br> If this continues, Keir Starmer will be out of office next week.

Reform has surged and projected to pick up between 1700-2100 seats.

Wow, up to 1700-2100 seats. It's not incredible that this is happening. It's incredible that the Davos crowd is so absolutely determined to privilege Muslim "migrants" over the actual native population who elects them, no matter how loudly the natives scream that they want to be prioritized, that they will gladly self-extinguish as a party rather than simply representing the interests of their own voters. Astonishing.
Remember, when they call other people "cultists" -- they are the ones so imprisoned in their social reinforcement and discipline bubbles that they will choose political death rather than dare upset the Karen Enforcement Officers of their cult.
Update: Now they've lost 83% of the seats they were defending.

(((Dan Hodges)))
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Reform are basically wiping Labour out in the North. It's not a defeat. It's not even a rout. Labour are simply ceasing to exist.

Nick Lowles
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Tonight’s results are calamitous for Labour. Not just for Keir Starmer's leadership, but for the very future of the party

STARMERGEDDON: In early returns, Reform gains 135 seats, Labour loses 90, the Fake Conservatives lose 36 (and I didn't even know they could fall any further), the Lib Dems lose 4, and the Greens gain 6. Note that the only other party gaining seats is the Greens and they're only gaining a handful of seats.
Update: Reform now up 145, Labour down 98.
Labour projected to lose Wales -- where they've ruled for 27 years.
Fulton County Georgia just discovered 400 boxes of ballots for Labour
Update: REF +156, LAB -107, CON -45
Brutal: In four out of five council seats where Labour is defending, they've lost. 80%.
I'm sure it's not this simple, but Reform is straight taking Labour's and the "Conservatives'" seats. They've lost almost exactly what Reform gained. If understand this right (and warning, I probably don't), all of London's council seats are up for election, and Labour might lose hugely there, as their old voters abandon them for Reform, Muslim Indenpendents, and the Greens.
REF +190, LAB -134, CON -56.

Updates on the Labour collapse in council elections -- which wags are calling #Starmergeddon -- from Beege Welborne. There are about 5000 seats up for grabs, Labour is expected to lose 1,800, Reform will probably gain 1,580, up from... zero. So this would be more than that.
People claim that while Labour has adopted the Sharia Agenda to appeal to the million Muslims it allowed to migrate to the country, those voters are ditching Labour to vote for the Muslim Independent Party or the Greens. Delicious. This shadenfreude is going straight to my thighs.
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Media bias and senationalism are as old as, well, the media:

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