Is Bush anticipating a Supply Disruption

[mrbowler]

Seems like Bush could be hurting himself a tiny amount by adding more oil to U.S. petroleum reserve unless they have information that a supply disruption is to occur?

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Current deliveries to the SPR are a tiny fraction, only 0.15 percent, of global oil demand, and have very little impact on oil prices.



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Any idea as to how the security is for these 70 locations?

[mrbowler]

Why don't they start to release some supply into the market? Almost near full capacity?

[CagedTroll]

I just looked at something... Still a little confused. Did oil prices go UP again today? Because I was watching the "futures" market before the New York exchange opened, and prices were headed down from Friday's peak. Something about the jobs report leading to less demand therefore lower prices... What happened???

[mrbowler]

Crude Oil I believe represents about 43% of price to gasoline, but since gasoline supplies are above estimates in last release I saw that accounts for why gasoline hasn't gone up as quickly at the pumps-plus the end of the summer driving season.

Oil Hits Fresh Record as Iraq Unrest Stops Output

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[mrbowler]

CT-You would think that these higher oil prices would have more of a impact on other world economies more then the United States. (Like Japan)


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"Oil is up more than $10 a barrel since the start of the year. In real terms, adjusted for inflation, prices are still well below 1980's peak of $80, following the Iranian revolution. But prices have surpassed those of 1974, the first oil shock, when crude averaged an inflation-adjusted $43 during the Arab oil embargo."

[mrbowler]

Here's what I mean with Exports:

Trade Gap Widens, Producer Prices Tame

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"It's extraordinary, I've never seen this big a swing in one month," Kevin Logan, an economist at Dresdner Kleinwort Wasserstein in New York, said of the worsening trade picture.

[mrbowler]

Somewhere around the $50 dollar level-should start feeling the price pressure. I suspect within the next week more talk about how the President is looking into the issue of releasing Strategic Oil Supplies, but on the other hand-it gives him fuel to open up more domestic drilling in which the Oil Industry is in favor of-so it will come down to which might be more important.


Oil Prices: Onward And Upward

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[mrbowler]

Oil rises toward $49 as government mulls reserves:

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[mrbowler]

Oil over $50 per barrel...wow this is going to hit folks come winter

Oil prices surge to another record high:

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"The only question is when this bubble bursts,"

[pandybat]

I don't understand all this, MrBowler. Can you give it to me in laymens terms? They only thing I do understand about it is not enough is being done to stop it. I worry about my grandparents being able to afford to stay warm this winter as this rate.

[pandybat]

Article from April of this year:

Saudis said to boost oil output
No. 1 oil exporter will reportedly increase production before election in effort to help Bush.

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[mrbowler]

Originally Posted by pandybat

I don't understand all this, MrBowler. Can you give it to me in laymens terms? They only thing I do understand about it is not enough is being done to stop it. I worry about my grandparents being able to afford to stay warm this winter as this rate.

I'm no expert when it comes to what the value of oil should be, but I believe that this can affect voters...when they are standing next to the gas pump. The heating issue will not be noticed until winter bills start arriving(well some states might be in winter season). The question politically would be whether President Bush would release more oil from SPR-Strategic Petroleum Reserve..although I believe that Clinton was criticized for doing such near elections...although with the hurricane(s) causing some supply problems according to what I have read would give Bush some cover. This topic might get some coverage in the next two debates.

[pandybat]

So we already have so much oil in reserve? Is that for emergencies or something? Like, what would have to happen in order for them to release some?

[mrbowler]

Originally Posted by pandybat

So we already have so much oil in reserve? Is that for emergencies or something? Like, what would have to happen in order for them to release some?

This is the contrast in positions...

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“That petroleum reserve is in place in case of major disruptions of energy supplies to the United States,” Bush said Wednesday. “The idea of emptying the Strategic Petroleum Reserve would put America in a dangerous position in the war on terror. We’re at war. We face a tough and determined enemy on all fronts, and we must not put ourselves in a worse position in this war, and playing politics with the Strategic Petroleum Reserve would do just that.”

Though no one has proposed “emptying” the SPR, Democrats for months have been urging suspension of fresh deposits, freeing up oil to satisfy unexpectedly strong global demand and help ease prices."


700 million-barrel stockpile
The Strategic Petroleum Reserve, established in 1975 after the original OPEC-induced “oil shock,” is a series of underground salt domes in four sites in Texas and Louisiana. Beginning in 2001, when the reserves stood at about 540 million barrels, the Bush administration has been steadily topping off the stockpile, which has a capacity of 700 million barrels. Currently, the SPR contains about 660 million barrels.

“The Strategic Petroleum Reserve continues to play a key role in keeping inventories tight,” A.G. Edwards analyst Bruce Lanni wrote in a recent research report. Some 19 million barrels have been added so far this year, on top of 37.5 million barrels that were added in 2003, he said.

[mrbowler]

I would assume that this pipe burst was not caused by any terrorist event?

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Oil Breaks Back Through $54 Barrier:

"A 76-centimeter (30-inch) oil line exploded in eastern Mexico on Wednesday, according to local officials. Enrique Fonseca, a spokesman for the Veracruz state civil defense agency, said workers from the government oil company Petroleos Mexicanos, or Pemex, had closed off the line and were trying to contain the spilled oil."