The White House today announced plans to tap the strategic oil reserves today.

This was sold as an effort to offset shortages from the Libyan production interruption. (story here).

(http://www.theblaze.com/stories/obama-decides-to-tap-strategic-oil-reserves-will-release-30-million-barrels/)This move is like an irresponsible person spending their 'emergency funds' to go on vacation.

The purpose of the strategic oil reserve is; "to counter a severe supply interruption". Once the oil is released, it must be replaced... at an even greater cost.

It is my opinion that this is a significantly short sighted and wrong minded move. I suspect we will hear more from those on both sides of the isle.... but if there is a real supply disruption (like a mine is the straights of Hormuz, or a hurricane in the Gulf of Mexico) the effects of this move could be devastating.

Even sources sympathetic to the president estimate this will lower the price of gasoline by 8 - 12 cents a gallon, and while it will likely garner some political points it seems to me to be a reckless political move.

Time will tell.

To read more about the strategic oil reserve read here (wiki).
(http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_%28United_States%29)

Elections are coming and he has to get the gas prices down.

Just a selfish maneuver on his part,it would be ironic if a major hurricane swept through the gulf and then slammed Houston.
He could kiss the election goodbye.

Actually I think its a good idea...I think (of course I could be really, really wrong) that this isn't just about what might happen regarding oil supplies...but the fact is we have something like six states with major fires going on...major flooding is going on and has happen wiping out alot of crops, plus the tornado's, etc, that along is going to impact the economy at some point in time. Certain food prices are going to rise and who knows what else will be effected by all the natural disasters that have happened. To counter all of this lowering gas prices will help when we get hit with higher prices at the grocery store and other places. Though none of this was mentioned..

The guy that does our over all recovery said things aren't going as well as expected...the higher gas prices we did endure hit us at a really bad time. Whenever gas prices go up so does everything else because it cost more to get those things to the stores. That really hurt those just getting back on their feet and for some it was a knock out punch. :(

And of course the President might just know something we don't. Maybe something big is about to happen in one of those states where so many protests are going on and our oil supply is going to be interrupted. I think we have to remember Presidents know alot of stuff the general public doesn't know that guides them in making the decisions they do. Like we didn't know they were tracking bin Laden until after the fact.

And it could simply be everyone keeps complaining he isn't doing enough to ease our burden and create jobs and that is the only reason he is doing it...to ease the pain at the pumps...which will help those struggling just to drive to work...those who do employee people won't have to laid off more due to high gas prices, etc. I know it will sure be a big help to me.

God bless

Ooh yeah, what happens if we use it up, and then a major natural disaster comes and, we have no oil.

It's Obama. Since he tapped the reserves he is, of course, wrong.

If he had not tapped the reserves and gasoline went to 6 bucks a gallon and groceries followed, he would have been wrong.

He loses with almost every single poster as soon as he gets out of bed in the morning. But if he stayed in bed, he would be a lazy bum. Sooo... he just loses.

And as a final thought - the election is more than a year away. If Joe Schmucetelli remembers the reserves being tapped it will certainly surprise me.

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This move is like an irresponsible person spending their 'emergency funds' to go on vacation.

No, this is like someone putting their vacation on a credit card at 29% interest. $3.43 cent per gallon gasoline does not warrant tapping the strategic reserve.

It's Obama. Since he tapped the reserves he is, of course, wrong.

If he had not tapped the reserves and gasoline went to 6 bucks a gallon and groceries followed, he would have been wrong.

He loses with almost every single poster as soon as he gets out of bed in the morning. But if he stayed in bed, he would be a lazy bum. Sooo... he just loses.

And as a final thought - the election is more than a year away. If Joe Schmucetelli remembers the reserves being tapped it will certainly surprise me.

Last time I checked, crude was going down before he announced tapping the reserve. Obama is the worst president in U.S. history. He has made Jimmy Carter look like a good president.

The White House today announced plans to tap the strategic oil reserves today.

This was sold as an effort to offset shortages from the Libyan production interruption. (story here).

(http://www.theblaze.com/stories/obama-decides-to-tap-strategic-oil-reserves-will-release-30-million-barrels/)This move is like an irresponsible person spending their 'emergency funds' to go on vacation.

The purpose of the strategic oil reserve is; "to counter a severe supply interruption". Once the oil is released, it must be replaced... at an even greater cost.

It is my opinion that this is a significantly short sighted and wrong minded move. I suspect we will hear more from those on both sides of the isle.... but if there is a real supply disruption (like a mine is the straights of Hormuz, or a hurricane in the Gulf of Mexico) the effects of this move could be devastating.

Even sources sympathetic to the president estimate this will lower the price of gasoline by 8 - 12 cents a gallon, and while it will likely garner some political points it seems to me to be a reckless political move.

Time will tell.

To read more about the strategic oil reserve read here (wiki).
(http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States))



Good post Amos;

Just about everyone with any intelligence in American politics and economics agrees with your assesment.
Its amazing that we still see these type of overt political ploys that in reality simply ruin the reputation of the politician that pulls this type of stunt.:mad:

Obviously releasing the oil is not going to affect the price in the long run; 30 million barrels is only about 1 and 1/2 days of US oil consumption....not enough to affect the price.
What drove the price down today was the realization from investors that Saudi Arabia was increasing its production to continue to make up for the reduction in Libyan oil production, AND the statement of admission from the Fed (Bennie baby) that the economy is 'slowing down". That spooked the oil traders and scared out the long speculators.

Faithful

From wiki:


The US SPR is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels (115,600,000 m3).

The current inventory is displayed on the SPR's website. As of May 31, 2011, the current inventory was 726.5 million barrels (115,500,000 m3). This equates to 34 days of oil at current daily US consumption levels of 21 million barrels a day. At recent market prices ($65 a barrel as of October 2008) the SPR holds over $34.3 billion in sweet crude and approximately $51.2 billion in sour crude (assuming a $15/barrel discount for sulfur content). The total value of the crude in the SPR is approximately $85.5 billion USD. The price paid for the oil is $20.1 billion (an average of $28.42 per barrel).[1]

Purchases of crude oil resumed in January 2009 using revenues available from the 2005 Hurricane Katrina emergency sale. The DOE purchased 10,700,000 barrels (1,700,000 m3) at a cost of $553 million.[2]

The United States started the petroleum reserve in 1975 after oil supplies were cut off during the 1973-74 oil embargo, to mitigate future temporary supply disruptions. According to the World Factbook,[3] the United States imports a net 12 million barrels (1,900,000 m3) of oil a day (MMbd), so the SPR holds about a 58-day supply. However, the maximum total withdrawal capability from the SPR is only 4.4 million barrels (700,000 m3) per day, making it a 160 + day supply.

Obama released less than 5% of the reserves.

I would not call that apocalyptic - but then again, I don't think everything Obama does is the precursor to the end of the world.

Good post Amos;

Just about everyone with any intelligence in American politics and economics agrees with your assesment.
Its amazing that we still see these type of overt political ploys that in reality simply ruin the reputation of the politician that pulls this type of stunt.:mad:

Obviously releasing the oil is not going to affect the price in the long run; 30 million barrels is only about 1 and 1/2 days of US oil consumption....not enough to affect the price.
What drove the price down today was the realization from investors that Saudi Arabia was increasing its production to continue to make up for the reduction in Libyan oil production, AND the statement of admission from the Fed (Bennie baby) that the economy is 'slowing down". That spooked the oil traders and scared out the long speculators.

Faithful

Nice. Very nice.

It won't even last two days at our consumption rate. You will only see cheaper gas for a while, once the oil released from the reserves is used up, you're back to paying of whatever they can charge you. Just a purely political move; Obama needs to rally the sheeple to his cause; the effects of the kool aid are waning.

Just about everyone with any intelligence in American politics and economics agrees with your assesment.

Um, no, we don't.

Can we stop with the generalizations please? Just because someone voted for or against Obama has absolutely no bearing on their intelligence. The smartest guy I know is a Democrat.

The purpose of the strategic oil reserve is; "to counter a severe supply interruption". Once the oil is released, it must be replaced... at an even greater cost.

It is my opinion that this is a significantly short sighted and wrong minded move.Not from me. It's dumb and dangerous. Nothing less.

Regrettably governments are not generally known for their wisdom but rather for their inevitable knee-jerk reactions to important strategic decisions. Expedience over common sense is what they do best.

It's a silly move and one that will back fire. Why is your government trying to major on the minors and forgetting what the fundamentals are for economic stimulus like cutting its spending that is gone wild.

The reserves have a capacity of 727 million barrels. Currently it is essentially full. obama has released about 30 million barrels. That is equivalent to about two days US consumption.

If he is doing this do the interruption in the Libyan oil supplies, one could reasonable ask why he waited three months after the first interruptions. Of course one could also argue that you don't react that quickly not knowing if the interruptions will be long in duration.

Personally, I think a more appropriate question would by why he waited until now when gas prices are down significantly from their recent high. I recall $4 and perhaps even a bit over $4 earlier this year. Today in town they are at $3.30. I'd be more interested to know the answer to that question.

Regardless, I wonder how much impact this will have and will it be quantifiable?

Of course, obama's next move will be a silent move and that will be to buy oil to fill the reserve back up. Hopefully the buyback price will not be higher than the price he gets for selling it. The smarter move, which isn't going to happen, would be to expand drilling and refining capacity.

...30 million barrels.... That is equivalent to about two days US consumption. That in itself is a scary statistic.

That in itself is a scary statistic.

The Lord bless you a 1000 times more as much as you have in your life now.
amen

If he is doing this do the interruption in the Libyan oil supplies, one could reasonable ask why he waited three months after the first interruptions. Of course one could also argue that you don't react that quickly not knowing if the interruptions will be long in duration.

Personally, I think a more appropriate question would by why he waited until now when gas prices are down significantly from their recent high. I recall $4 and perhaps even a bit over $4 earlier this year. Today in town they are at $3.30. I'd be more interested to know the answer to that question.

.

Hi Earlycall;
Obviously, as I stated earlier this move will have minimal impact on Oil (and gas) prices.
The reason he waited until now has much more to do with politics and OPEC.

First, its all about this little war we have going on bettween the West and OPEC.

OPEC, being the "illegal" Cartel that it is, regularly manipulates oil prices to its advantage (rather than allowing free markets to set the prices) by restricting (or loosening) its members production 'quotas'.....in order to control the price of crude. They do it by member votes at the OPEC meetings....

It just so happens that the current "President' of OPEC (which is "rotated" each year) is, you guessed it, IRAN !
So naturally IRAN is pushing to RESTRICT production of OPEC member nations to drive prices up on those "evil" Western nations who are stopping them from its nuclear ambitions....(and make more $ to boot).

At the last OPEC meeting (when they 'agreed' to not increase production) , our friends Saudi Arabia, seeing that oil price was far too high, "stated" that they would RAISE their production UNILATERALLY, even if OPEC agreed to restict supply. They stuck their neck out for the West.

A few days later the International Energy Agency (IEA) which consists of the energy CONSUMING nations (mostly the West), decided (with the compliance or instigation of Obama) to release 60 mil. barrels of reserves, 30 million of which came from US reserves.

It was basically a political rebuke to IRAN (and OPEC) , but since it feeds right into Obama's election agenda to appease the liberal "rebuke the Big Oil- who cares about free markets" agenda, it is not exactly an objective decision.

So, as Paul Harvey used to say, "Now you know the REST of the story".:D

Faithful

Hi Earlycall;
Obviously, as I stated earlier this move will have minimal impact on Oil (and gas) prices.
The reason he waited until now has much more to do with politics and OPEC.

First, its all about this little war we have going on bettween the West and OPEC.

OPEC, being the "illegal" Cartel that it is, regularly manipulates oil prices to its advantage (rather than allowing free markets to set the prices) by restricting (or loosening) its members production 'quotas'.....in order to control the price of crude. They do it by member votes at the OPEC meetings....

It just so happens that the current "President' of OPEC (which is "rotated" each year) is, you guessed it, IRAN !
So naturally IRAN is pushing to RESTRICT production of OPEC member nations to drive prices up on those "evil" Western nations who are stopping them from its nuclear ambitions....(and make more $ to boot).

At the last OPEC meeting (when they 'agreed' to not increase production) , our friends Saudi Arabia, seeing that oil price was far too high, "stated" that they would RAISE their production UNILATERALLY, even if OPEC agreed to restict supply. They stuck their neck out for the West.

A few days later the International Energy Agency (IEA) which consists of the energy CONSUMING nations (mostly the West), decided (with the compliance or instigation of Obama) to release 60 mil. barrels of reserves, 30 million of which came from US reserves.

It was basically a political rebuke to IRAN (and OPEC) , but since it feeds right into Obama's election agenda to appease the liberal "rebuke the Big Oil- who cares about free markets" agenda, it is not exactly an objective decision.

So, as Paul Harvey used to say, "Now you know the REST of the story".:D

Faithful

Yes, I was aware of the Saudis move to increase production and I know about OPEC and what they do as well. I was not aware that Iran was rotated in as you say. Still, we've seen prices come down and I believe that is due in large part to the Saudis increase in production. But what will the impact be fro releasing oil from the reserves? If the prices continue to decline to some extent, obama will surely claim it is because he released oil from the reserves, but will that actually be the case?

To those that would argue that would in fact be the case, I would argue this: if the Saudis had increased production just enough to provide about two days worth of our usage, would we have seen the prices drop as they have? While I am no expert on the subject, I would think it is safe to say they would not have. Yet, still, I fully expect obama, the libs in congress and the liberal media to exclaim the the prices dropped because of obama's "wise" move. And non-thinking people will believe it.

I don't quite get the idea that because of OPEC deciding what to do with their product, the free market is somehow restricted from operating. Prices operate on both demand and supply. As with all products, someone controls supply. The free market wasn't not operating because Nintendo didn't produce enough Wii consoles for Christmas a couple years ago - the consoles got much more expensive from secondary sources and demand was high. That's a free market economy.

Besides which, most of our oil comes from Canada and Mexico last I checked.


Elections are coming and he has to get the gas prices down.

Just a selfish maneuver on his part,it would be ironic if a major hurricane swept through the gulf and then slammed Houston.
He could kiss the election goodbye.

What elections?

I don't quite get the idea that because of OPEC deciding what to do with their product, the free market is somehow restricted from operating. Prices operate on both demand and supply. As with all products, someone controls supply. The free market wasn't not operating because Nintendo didn't produce enough Wii consoles for Christmas a couple years ago - the consoles got much more expensive from secondary sources and demand was high. That's a free market economy.

Besides which, most of our oil comes from Canada and Mexico last I checked.



What elections?

The elections for which obama is already campaigning.

Even sources sympathetic to the president estimate this will lower the price of gasoline by 8 - 12 cents a gallon, and while it will likely garner some political points it seems to me to be a reckless political move.

What??? O'bama play politics??? Next you'll say is that he would mess with health insurance, or even go so far as to give a big company to...ohhh...say, a union. How dare you be so bold....:rolleyes:

The elections for which obama is already campaigning.
Everyone is campaigning for them, but they're more than a year off. The idea that he's freeing a tiny portion of the reserves now for elections more than a year away seems... illogical.

Everyone is campaigning for them, but they're more than a year off. The idea that he's freeing a tiny portion of the reserves now for elections more than a year away seems... illogical.

I would tend to agree actually. The elections seem far off enough that you have to wonder if anyone would even remember this by then. Nevertheless, it does seem he is already campaigning and if he is, then everything he does from here on out will be with the election in mind. It would be illogical to do otherwise.