Posted on 05/20/2004 6:27:51 AM PDT by OESY
New York Senator Charles Schumer is famously famous for grandstanding, but of late he's outdone even himself. We mean the demand from him and 29 other Senators that the Bush Administration release millions of barrels from the Strategic Petroleum Reserve as a way to lower gasoline prices.
As political theater, we suppose this is clever. By pretending that President Bush has control over oil prices, Mr. Schumer can blame him for $2-a-gallon gasoline. But as the Senator well knows, no President controls the price of either oil or gasoline, and releasing stocks from the SPR will not change the fundamentals of the oil market. As Mr. Schumer also knows, or at least should, such a release would knock off at most only a few cents from gasoline prices.
Unless, of course, he wasn't paying attention back when this gambit was tried in 2000 by the Clinton Administration. With oil above $35 a barrel and a Presidential election looming, Bill Clinton released 30 million barrels from the SPR. Prices dropped to $30 a barrel for a few days but then bounced back, and pump prices fell by all of a penny a gallon.
(Excerpt) Read more at online.wsj.com ...
This just in from the opinionjournal.com--
The current price pressure comes from those eternal market movers -- supply and red-hot demand. Supply is tight because of lower than normal inventories and OPEC's reluctance to increase production. Meanwhile, the economic recovery in the U.S. and manufacturing growth in China have created a powerful demand for oil. The result is higher prices.
Recently, the oil market has also been hit with a "fear" premium -- especially concern that terrorists will disrupt the flow of oil from the Persian Gulf. There have been several violent incidents in recent weeks. In Iraq, suicide attackers launched three boats laden with bombs toward oil tankers in Basra. Then saboteurs damaged an Iraqi pipeline, cutting exports by almost a third. More frightening, Saudi gunmen killed five Western contractors at an oil facility in western Saudi Arabia, causing most of the remaining personnel to leave the country. Some market watchers figure this anxiety fillip could be worth as much as $10 a barrel.
...
That's lamentable, but for an economy growing by 4% or more it is hardly terminal.
...
The U.S. strategic oil reserve has the serious purpose of ensuring oil supplies in the event of a threat to national security. It is not the play-toy of politicians. Releasing oil for political purposes would make matters worse by removing the incentive for private companies to carry inventories. We were glad to see Mr. Bush declare yesterday that he won't touch the SPR, despite the political grandstanding from certain Senators.
Chuck Schumer ( a thoroughly,oleaginously unpleasant US Senator from NY )demands the oil reserves be tapped-on behalf of NY,of course-about four times a year.
I would love to see the reserves tapped and only allocated to Red States.
I wish the good citizens of NYS would retire UpChuckie Schumer - "The Putz."
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.