Obama Over a Barrel, Decides to Pull Plug Hoping Drivers Forget

Thursday, June 23, 2011

Faced with another decision by OPEC not to raise production quotas for oil, and calling the “war” in Libya serious enough to disrupt oil supply, the Obama Administration and dozens of other countries will release oil from strategic petroleum reserves to temporarily lower the world price of oil (and make us more vulnerable to oil's strategic status).

Such action clearly demonstrates that the rhetoric from the Administration to “lessen” our dependency on foreign oil is not backed up by action.

Rather than endorse and work for solutions to increase the variety of domestic fuels and build infrastructure that would lessen America’s dependency on foreign oil, the Administration chooses to play politics with oil, knowing that the price of gasoline drives political public opinion. It is good timing. They can't take this action during an election year.

The fact that they were able to get 23 other countries to go along is amazing. Then again, maybe it's not so amazing, given that our dollar is their currency...and right now our economy is struggling.

If there was ever a doubt that politics and not emergencies led to this decision, Politico headlined a report on June 21, “Obama Not Safe on Gas Prices Yet” saying, “But cheaper gas through the summer won’t ease the pressure on the president, according to Democratic strategists. A year ago, a gallon of gas was almost a dollar less. “Gas prices are where the rubber meets the road at the intersection of foreign and domestic policy,” said pollster Brad Bannon. “Prices have gone down, but voters are still steamed.”

The New York Times highlights the real reason for the drawdown — the “political calendar.” In a report on June 23, they wrote, “One person with knowledge of the decision said it appeared to be driven by several factors: the United States political calendar; the need to bring down prices for advanced economies; the expected increase in demand as the summer vacation season gets under way; and frustration at the failure by OPEC to raise production.

“You don’t get elected with gas at $4 a gallon,” he said. “If you were looking solely at fundamentals, the I.E.A. would have moved after the Libyan crude came off the market.” He added: “It looks like it’s about price management, but you will never hear that from the I.E.A.”

Price management? Nah. Price manipulation. Who should the FTC be investigating now for anti-trust action in the oil markets? How about the political operation inside the White House?


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