« Straight Talk from McCain Campaign - Their Healthcare Plan Sucks | Main | Obama Ad Hits on Palin Pick, Economy »

GOP Oil Company Suckups Wrong Again

Anyone else notice that oil has dropped from $140 a barrel to $70 a barrel without drilling a single new offshore well and without opening up a single square foot of Wilderness Reserve area?

And here you thought the Republicans were being honest when they told you that we had to "Drill Here, Drill Now" in order to find relief from oil prices. It should have been obvious McCain and Palin were lying to you -- the subject was oil and their lips were moving!


Note: Wizbang Blue is now closed and our authors have moved on. Paul Hooson can now be found at Wizbang Pop!. Please come see him there!

  • Currently 2.3/5
  • 1
  • 2
  • 3
  • 4
  • 5
Rating: 2.3/5 (6 votes cast)


Comments (9)

Steve:

Right. They should have known we could get the same results with a worldwide economic collapse. And you save ten years time with a collapse.

Lee Ward[TypeKey Profile Page]:

Ahhh, so the price of oil is tied tied to the stock market more than it is tied to consumption.

Thanks for verifying that "Drilling" is not the answer to reducing the price of gasoline.

engineer:

"Anyone else notice that oil has dropped from $140 a barrel to $70 a barrel without drilling a single new offshore well and without opening up a single square foot of Wilderness Reserve area?"

It's called the law of supply and demand. When demand goes down, without the supply decreasing, the price goes down. When supplies go up, without an increase in demand, the price goes down.

Futures markets drive the cost of an item based on conditions anticipated in the future as they relate to the preceived supply or demand of a commodity.

On July 14, 2008 the oils futures hit their highest level ever.

http://www.eia.doe.gov/emeu/international/crude2.html

On the same day, President Bush announced the lifting on the executive ban on offshore drilling.

http://www.cnn.com/2008/POLITICS/07/14/bush.offshore/index.html

The futures market preceived this as a future increase in supply, thus the end of the increase in futures prices. With the possibility of offshore drilling, the futures over 20% in the next month.

Now, it is true that no new wells were drilled, but instead of increased supply, we had the other end happen. We had a drop in demand due to a worldwide slowing economy. The basic law of supply and demand. If the world economies had kept chugging along, the price of oil would have stabilize until more supply (from drilling) hit the markets at which time the price of oil would have fallen further.

Just the anticipation of future drilling caused the price of oil to drop. The actual drilling would cause even a further reduction in the cost of oil.

"And here you thought the Republicans were being honest when they told you that we had to "Drill Here, Drill Now" in order to find relief from oil prices."

As shown, just the anticipation of drilling lowered the price of oil. And with actual drilling it would have come down even more. Everybody likes the cost of oil coming down. Unfortunately it would have been much better if it was due to increased supply from drilling, than from a slowing economy. Unless of course, you think a recession is better.

Steve:

Well said, engineer.

Steve:

Once they got tired of beating up "Big Oil", Democrats did their best to demonize speculators a few months ago when prices were shooting past $4/gallon. I haven't heard any of them praise the speculators now that they are pushing oil prices the other direction.

Did I really verify that drilling is not the answer to reducing the price of gas? So, besides a serious world-wide economic crisis, what else will work, Lee? If we aren't going to drill, we need a plan B because world-wide economic crises are tough to manufacture and you wouldn't want to have them too often!

Lee Ward[TypeKey Profile Page]:

Bush lifting the drilling ban had nothing to do with the falling price of oil. Lifting the offshore drilling ban doesn't produce a drop of oil anytime in the next five plus years - and oil traders know that.

The price of oil moves up and down based purely on speculation - it's the trading of oil futures -- and the price drop were seeing now is based on speculation that oil demand would drop as the recession grows and industry scales back.

Sometimes speculation hinges on actual supply and demand, such as a hurricane spotted two days from shore will cause oil to spike in price, under speculation that refineries will be hit - but a new supply of oil resulting from a lifting of offshore oil drilling -- that's ten years away from the gas pumps --- has absolutely no effect on the price of oil today.

Thanks for further demonstrating that Republicans don't have a frigging clue about the drivers on the price of oil - and for demonstrating the extremes to which Republicans will lie to defend their pals in the oil industry.

You putzes take the cake... that was an amazing demonstration of moronic, partisan analysis...

puhLEEZ:

The sudden drop in the price of oil was SO predictable. I believe this happened back in 2000 or 2004. Somebody's wagging the dog here. And it ain't Barack Obama.

engineer:

"The sudden drop in the price of oil was SO predictable. I believe this happened back in 2000 or 2004. Somebody's wagging the dog here. And it ain't Barack Obama."

I am so glad that Lee requires 'proof' of your statements. Oh wait, it is only statements that contradict him that requires 'proof'.

Oil prices in 2000 were at the upper $20's and rose to the lower 30's in early November. In 2004 oil price were in the mid 30's most of the year, but rose before the election to the low 50's. The exact opposite of what you posted puhLEEZ. So puhLEEZ, don't spout your 'moronic, partisan analysis'.

"The price of oil moves up and down based purely on speculation...."

That is one way that oil prices fluctuate.

Actual supply and demand is another. When rebels in Nigeria blow up a pipeline, supply goes down, and prices go up. There is no speculation there, it is an actual event. The speculation comes in when it is not known how long to fix the line, and whether additional lines will be sabotaged.

The price of the dollar versus other currency also affects the price of oil.

"...the price drop were seeing now is based on speculation that oil demand would drop as the recession grows and industry scales back."

As I noted, the original price drop (from $147)was due to the lifting of the ban (or was it just a coincidence that it happened on the exact day?). The price of oil than hovered between $115 - $125 throughout the month of August after this initial drop. As information about a slowing world economy began to immerge, the price dropped from $116 to $100 during September. The drop in October is due to the worsening of the financial sector.

Your views of the price of oil being based on speculation only is overly simplicist and shows that you don't have a grasp of the complexities inherit in the dynamics of the oil industries.

Lee Ward[TypeKey Profile Page]:

"Sometimes speculation hinges on actual supply and demand, such as a hurricane spotted two days from shore will cause oil to spike in price, under speculation that refineries will be hit - but a new supply of oil resulting from a lifting of offshore oil drilling -- that's ten years away from the gas pumps --- has absolutely no effect on the price of oil today."

That's what I wrote, and it's still speculation that drives the price even when a pipeline is damaged.

When the price moves on an an actual event - as I suggested - like a hurricane, pipeline damaged, whatever etc - the price is still moving on "speculation" as to what that event will do to the future flow and price of oil.

The oil production pipeline is never running at 100% capacity. Production that is reduced in one area can be made up elsewhere.

Another example is the hurricane that hit Galveston Houston. Refineries weren't damaged, but prices spiked before the hurricane hit on speculation that there could be a problem.

And even if refineries were damaged the price would jump based on speculation of the impact that would have on world markets. Would OPEC increase production to make it up or not, for example.

"As I noted, the original price drop (from $147)was due to the lifting of the ban (or was it just a coincidence that it happened on the exact day?)."

Yes, it was just a coincidence, or Bush waited until prices were moving to make his announcement. Or Bush pals in the oil markets pushed the price down that day as a favor to their buddy Bush so that Republican trolls could claim credit that Republicans had reduced oil prices.

The price of oil today is not hinging on the possible wells that might be drilled and producing 10 years down the road, Engineer.


Contact

Send e-mail tips to us:

[email protected]

Advertisments

Categories

Archives

Technorati



Add to Technorati Favorites

Credits

Publisher: Kevin Aylward

Editors: Lee Ward, Larkin, Paul S Hooson, and Steve Crickmore

All original content copyright © 2007 by Wizbang®, LLC. All rights reserved. Wizbang® is a registered service mark. Wizbang Blue™ is a trademark of Wizbang®, LLC.

Powered by Movable Type 3.35

Hosting by ServInt

Ratings on this site are powered by the Ajax Ratings Pro plugin for Movable Type.

Search on this site is powered by the FastSearch plugin for Movable Type.

Blogrolls on this site are powered by the MT-Blogroll.

Temporary site design is based on Cutline and Cutline for MT. Graphics by Apothegm Designs.