McCain Shovels the Bullshit

ISTR that the OPEC nations have acted, before, to price out competing nations’ production before, by increasing supply. And I do believe that one reason for the oil bust in Texas and Oklahoma was, again, because OPEC chose to price crude out of reach for domestic producers to compete with.

I don’t mean to say that OPEC must or will react to this by increasing supply. But the nations in the cartel have acted together in the past to manipulate prices with the intent of stifling competition. It could have a faster effect.

No, they are contracts for the price thirty days into the future. Not years.

FoieGrasIsEvil

Interesting read. I’m still not convinced that offshore drilling will help anyone other than the oil companies.

That’s something we could prevent with legislation.

No. Unless in the agreement, we specify price controls for oil destined for US motor fuel. If you want to sell crude for $150 a barrel to the chinese, what do we care? You’re not gonna pump from under our feet and charge $4 a gallon.

Agreed on this point. Unless there isn’t enough oil on that land to dig for.

Could be, but what a coincidence.

Why not “and” instead of “or” ? No one has been able to tell me why it wouldn’t be prudent to drill domestically AND pursue alternative energies at the same time. The market WILL sustain both directions because we “KNOW” that there’s a finite supply of oil. Don’t we?

Now the argument can be made that once the oil starts flowing that the companies will just pump until they pockets explode with cash. This is where the Gov’t pops in and says "that’s it, you’re done, in article 79, section 159, subsection 236, paragraph 95 of addendum g to the oil lease sub agreement you signed back in 2008, it says we can reduce your impact by reducing and/or eliminating your ability to drill after you’ve made back you investment.

I agree with this. It will be a win-win for the consumer if the OPEC countries think that the US is drilling her own texas tea, they’ll trickle the good stuff into the market and drive prices down. The oil companies, shame of shames, will lose. Sad. (ok, not really).

You all are a bunch of hijackers!!! Bah!!

Couldn’t OPEC reduce supply by the same amount and drive prices back up? I’d wager they’re trying to find that sweet spot.

I think this is one of the crappiest of his ads so far. Unfortunately I know a 90 year old house bound woman that is going to be voting for McCain because he was a prisoner of war. That sure is the reason to pick your candidate for president.

Not without abrogating numerous trade agreements and treaties, you couldn’t. And in this case you just really, really don’t want to break at least one of the trade treaties in question. Specifically, NAFTA requires free trade of oil between member states. So what, you say? Look up the amount of US oil consumption that comes from Canada and Mexico, and then ask yourself if you want to break NAFTA and thereby grant the Canadian and Mexican governments the right to set export taxes on oil sold to the US.

Anyways, even if you do break NAFTA, at the quantities we’re talking about the effect on both global and US oil prices would be the same as if you hadn’t - given that the US is the largest consumer of oil in the world, and that US production doesn’t come close to matching US consumption, and that other things being equal a barrel of oil will be sold to the customer with the lowest logistical costs (shipping, mostly), all that oil would end up going through US refineries anyways, and would impact the global market in exactly the same way whether it’s restricted from being sold outside the US or not.

The total extra production available to the US just isn’t that much - it’s not insignificant, but the impact on oil prices is going to be marginal, not dramatic.

A few things here.

Should we be worried about some sort of backlash from other countries or OPEC? I couldn’t imagine them being be happy with such an arrangement. Would we violate any trade agreements by doing so? I doubt “big oil” would allow any legislation remotely near price controls. I haven’t heard one mention of them as a condition for opening up drilling.

Not much of a coincidence, what Bush did was symbolic. It’s highly unlikely that congress will lift the ban, which is what’s needed to get things rolling. There are other factors that seem more plausible.

1) The Senate voted 94-0 to advance legislation to curb speculators.
2) Oil Tycoon T Boone Pickens announces a dumping a billion into wind energy.

Can we pursue both? Seems like there’s only so many tax breaks and subsidies we can provide to companies. By discouraging drilling, we’ll also hopefully expedite a transition to alternate energies.

That would be nice, but I don’t see that happening. Call me a pessimist.

Do you believe you can’t do calendar spread options with oil?

sigh

Do much work in futures, do you?

I’m going out on a limb here and guessing not.

Aren’t the strike prices the same though? Doesn’t that simply extend the time frame, but not drive up price?

/preparing for evisceration

Is that what you immediately think of when some one quotes the current price of oil? I am not interested in your obfuscation, Bricker.

But people…John McCain has assured us that he has talked to oil executives, who promise that oil prices will go down as soon as they can stick an oil well into every pristine coastline in the country. That’s good enough for me. After all, what incentive do oil executives have to lie?

I prefer to think of this as a distasteful yet necessary option to ease the transition into alternative transportation.

[hijack]

Thanks to blogger along at DailyKos who’s uncovered this delicious bit of unintended humor:

All I know is that somebody is drinking my milkshake.

Someone else is trying to drill mine.

Agreed. The Summer 2000 gasoline update data.

Cartooniverse

Better cite If you want to be pedantic, prices for regular were around $1.50 for most of 2000, and no less than about $1.25 (and that was in January).

However, the price was under $1.00 as recently as March 1999, and was at most $1.25 from 1991 through the end of 1999.