Bush Admin Manipulates Oil Supply

[Merrill]

Neoconseravtives like Bush are always whining about big government yet love the pay and the benefits. Without big government how would the Bush family and James Baker III along with all of those Reaganomics clowns
since the 1980's be able to constantly screw over the comsumers/taxpayers/voters? They put themselves up as great samaritans yet in the end the oil and military industrial complex rip off the taxpayers by way of many cabinet level departments. The healthcare industry should be included among these corporate welfare giants. Outsourcing american jobs fits right in with this comment.

Contrary to popular belief big government has made many anti big goverment politicians and corporations plenty of dough. The next time, which should be soon,politicians go screaming around about big government this and that I'd say they are full of crap. The government keeps growing and so do their wallets.


Manipulating the strategic oil reserve?
Thomas I. Palley
Tuesday, January 30, 2007

Last year was the year that oil prices came close to breaching $80 per barrel. This was despite the fact that there were no significant supply interruptions and oil demand fell in industrialized countries. That raises the question of what caused the spike.

It turns out there is good reason to believe that record oil prices may have been due to our own strategic oil reserve, which the Bush administration may have been manipulating to drive up prices for the benefit of its supporters. This is something Congress must investigate, and here is some preliminary evidence.

Any finding of manipulation would be economic treason. When global oil prices increase, Americans must pay more for imported oil. That increases the U.S. trade deficit. Alternatively, one can think of price manipulation as the equivalent of a tax increase on American families paid to foreign governments.

While some energy scandals in the Department of the Interior are already under investigation by Congress, the big enchilada is the strategic oil reserve. The key to understanding any manipulation is demand and supply and oil storage capacity.

The last three years have seen rapidly rising oil prices, and a tight oil market has meant that even small increases in demand may have had large price impacts. During this period, the Bush administration purposely expanded inventories of the strategic oil reserve, which rose from 600 million barrels in May 2003 to 700 million barrels in August 2005.
The administration therefore increased demand by 125,000 barrels per day, and oil prices rose from $30 dollars per barrel to $70 dollars in that same time period.

As oil prices rose, Wall Street became increasingly engaged in commodity speculation, and this is where storage matters. As speculators entered the market, the spot price of crude oil rose significantly above the futures price in late 2003.

More at link.....


Thomas I. Palley, an economist, runs the Economics for Democratic and Open Societies Project (www.thomaspalley.com).
This article appeared on page B - 7 of the San Francisco Chronicle
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[salin]

1. Very good read

but a hint - per forum rules and "Fair Use" rules - you should edit the text of the article, down to a couple of paragraphs and include a link to the articile from the SF Chronicle.

Thanks for bringing the article to the forum.

[Tandalayo_Scheisskopf]

2. I have been saying that...

For years, ever since I learned that The Koch Brothers(one is married to Doro Bush) are the administrators of the SOR program.

Furthermore, not to minimize the looming Peak Oil possibilities, it seems beyond coincidence that this subject should have rocketed into the limelight at the same time as this and other things petro-related were taking place.

[salin]

3. I didn't know that (Koch bros administer SOR program)

Interesting...

[salin]

4. kick