Why did Obama release strategic reserve oil

G

general35

5,000+ Posts
I'm guessing it was a political move because I see no reason why we would release strategic reserves when we arent in a crisis. WH has said it is because of Libya but we do not get any oil from Libya and it really isnt affecting the global price of oil that much. AS a country, we use 30 million barrels or so a day. The whole thing seems comical, juvenile and irresponsible. par for the course for this administration.
The Link
 
Now this is just dumb. Parroting again?

Oil is a driver of industry. It is a real cost in almost every product made (whether in manufacturing or delivery). Just because we don't get oil from Libya means nothing since oil price is determined by global demand. The economy looks weak, so as far as I can tell, he is doing what he can to help prop it up plus bringing in revenue which is about all he can do since the tea party doesn't want to raise taxes.

Is there a real reason for the SPR anymore? I'm not sure there was ever a very good reason for it, but to use this as political fodder *sigh*
 
As a user of gas I like it. When this little amount of oil causes a 5% drop you know speculation is rampant.

Great for liquidity in the market but not so great when it is one-sided and completely overwhelms actual supplies on the ground.

Speculators better becareful and not over-extend themselves. Especially when you are only forking over via margin 5% of the value you are controlling.
tongue.gif
 
Oil is a driver of industry. It is a real cost in almost every product made (whether in manufacturing or delivery). Just because we don't get oil from Libya means nothing since oil price is determined by global demand. The economy looks weak, so as far as I can tell, he is doing what he can to help prop it up plus bringing in revenue which is about all he can do since the tea party doesn't want to raise taxes.
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you are missing the point, it is a short term solution and the price of oil is under $100 a barrell which is acceptable. why are you for raising taxes on small businesses that are struggling to get by? apparently, you have a problem with this because the tea party is against it and this somehow relates to obama's release of a days worth of oil how?
 
SkySooner---if this was a solid decision to bring in revenue, why wait until WTI had come to a pressure point under $98/bbl, instead of well over $110 NYMEX avg in April? When Clinton tapped the reserves, price at the pump was hardly affected, and even at that, didn't last very long.

Instead of tapping SOR, why not expedite granting process to PROVEN reserves in Anwar, in the Rockies, and even limited grants in shallow offshore?

If this was a tactic to get back at the Saudis after the recent OPEC failure to get them to increase production to what the US had wanted, what's to stop them from overriding OPEC agreements, shrink daily supply to counter 30MM bbl, watch Brent-WTI spread go crazy, and negate the reserve sale?

in my opinion, this was tactic was too late to help, not researched enough, or simply political posturing gone awry.
 
Everything is political. From what I can see there isn't much that can be done right now. Interest rates can't go down any more. We can't spend our way out of it. We can't raise taxes too much too fast. Our credit worthiness is at stake, and we have an impasse in Congress.

General-I didn't miss the point. I'm just saying looking at this at a macro level, what do you expect him to do. If he does nothing, you yell. If he does anything, it is the wrong move.

I also agree with the last poster on it was too late. It would have been better to do it with oil as high as $110. Since this is a speculation driven market though, I suspect the people that talked him into this didn't think it would last long (and it didn't).
 
election talking point

or does he think supply effects the price? then drill baby drill.

"To put it in perspective, the 30 million barrels of oil that the U.S. plans to contribute is the equivalent of seven and one-half days of oil production that we are projected to lose in the Gulf of Mexico as a result of the federal drilling moratorium and the government's inability to permit ongoing and future projects in the Gulf region," Don Briggs, president of the Louisiana Oil and Gas Association, said in a news release.
 
It's all about helping wall street move the market. And it reminds the doubters who is boss without having to consult congress.
 
TexasGolf

That is a sobering perspective.

Anyone who thinks what Obama did was a good idea explain why it was a good idea please.
I can't see anything worthwhile out of it but I am not all that savvy on the issue
Please help us understand what it was supposed to accomplish
 
Personally, I think Barak just wanted to give a FU to the gozillionaires who got tired of driving up the price of gold with their lightly taxed incomes and decided to speculate in gasoline. A lot of the speculators aren't really interested in the fundamentals, trade often and respond rapidly to a pricing signal like the one the President just sent. Sadly enough, it's probably not the gozillionaires that got hurt -- just the guys who waited until most of the money was made and got in and got smushed.
 
I actually think it's a smart move, and not something Obama came up with on his own.

The price of oil is too high. Based on current demand and supply it was 15-20% overpriced on the market. The cause for this is oil speculators going long on oil contracts., What this is is a shot across the bow for speculators. They cannot cotinue to go long now because the government "could" release more at any time now that they have done this.
 
+1 for smart move as well. But the real motive should be decreasing our consumption and dependency on middle eastern oil with alternative sources. (same old story for the past XX years)
 
Totally political, the average voter will not bother to research the already falling oil prices or how the currency changes affected the prices. All they will see is oil dropping after Obama announced his plan. Give the President credit, his timing is pretty good.
 
Yes, please don't think that me saying it was a smart move means I think it wasn't politically motivated. No one in Washington does anything "Just because it makes sense". I'd say the same regardless of who is in office.
 
"House Natural Resources Committee Chairman Doc Hastings (WA-04) released the following statement after the Obama Administration announced a release of 30 million barrels of oil from the Strategic Petroleum Reserve: “The Strategic Petroleum Reserve is intended for situations when there’s a dramatic supply shut down, not to achieve short-term political gain. However, this is a clear admission from the Obama Administration that increasing domestic oil supplies will help lower costs. Unfortunately, for the past two and a half years, the Obama Administration has consistently blocked efforts to expand American energy production and has actively placed moratoriums on domestic development. This release will only cover a fraction of the oil production lost from the Gulf of Mexico due to the Administration’s moratorium and permitting delays. The Administration’s anti-American energy policies have left the United States increasingly vulnerable to the whims of the world oil market and OPEC’s erratic decisions on oil supply. Rather than tap the SPR, weakening our domestic security should a real supply disruption occur, we should look to develop our true oil reserves in the Gulf, Alaska, the Outer Continental Shelf and our public lands in order to create jobs, lower prices, reduce our dependence on unstable foreign energy, and strengthen our national security.”
The Link

Chariman Hastings agrees with the point Texas Golf made.
Obama wants to have it both ways but hopefully the people are smarter than that.
 
Seems pretty clear from the article that the release was in coordination with other countries to help increase supply due to decrase in supply we have seen since Libya's oil production dropped. They waited to see if OPEC would increase supply and they did not so this is the only step they could take.
 
Just another fine example of President Inept!!! A dollar late and a dollar short.

He should have released 300M barrells 4 months ago. Everyone knows that Spring is when Gas prices spike and all the unrest in the ME, he should have done this in February or March and it should have been a lot more than 30M barrels.
 
This is an example of what the admin does when there is not much else to stimulate the economy.

It was an easy move because we are up to our ears in oil relative to usual supplies.
 
another abuse and misuse of the presidency. The current world circumstances to not come close to meeting the requirements or intent for these oil reserves. Just another way in which Obama has proven that he does what he wants to do, not what is required by the office or the Constitution.
Hail Obama... yeah.... Love that we are now living in a dictatorship.
 
typical and predictable responses from those against Obama. He either responds too late or not in the right fashion, and others say he violated the office of presidency in doing so. So basically if he does anything he is criticized, if he does nothing he is criticized.
 
hornpharmd,
I generally like your posts even when I disagree, but that last one is just a gross mischaracterisation fo those who oppose THIS action of Obama.
The reason I oppose it, just as I would have opposed a release of oil by the Bush administration is that the SOR is NOT for the purposes for which Obama used it. It is for extreme circumstances in which the country might find itself. I would put those up there with something akin to a WWiII where we are at war with Iran and oil is no longer flowing at all from the middle east. That is a very extreme example, but as I understand the SOR that is the type of situation they are for.
Even then I would see the oil to be used by the military and official government business needs, NOT to flow into the countries general consumption of oil. That is the way I see it. I am one poster who has listed abuses of power by Bush on here, and Bush and Obama are the only two men to have been President whilst I have been a WM poster, so my history only goes back that far. Should I repost about those things, or will you just acknowledge, at least, that I am a fairly strict Constitutionalist who truly believes that the federal government ONLY has the powers enumerated in the Constitution and nothing else? I am not criticizing Obama for action, I am criticizing him for the nature of his action.
 
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