ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Monday, April 04, 2005

BuzzFlash sees bushies behind everything

BuzzFlash uses this headline to link to this story in the AP.

Headline:

It's the Oil Stupid -- and the Profiteering! Crude Futures Near Record-High Levels. Bush and Cheney Got What They Wanted.
I could SWEAR that we went into Iraq for CHEAP gas... and Afghanistan for cheap natural gas or something. Not sure how higher pricer per barrel being paid to Middle Eastern countries benefits Bush, Cheney, Halliburton, Occidental Petroleum, etc, etc, but I'm sure the good folks at Buzzflash have an explanation handy for me. Also, isn't it a GOOD thing if those countries get a higher price per barrell (from the perspective of those countries, not from a US perspective). I thought it was our lust for cheap oil to keep our industrial machine humming that lead to the "rush to war."

Oh, and here's some info in the first paragraph of the AP story:
Oil prices briefly topped $58 a barrel Monday, then reversed course, as OPEC considers boosting its supply to address fears about rising demand and potential supply disruptions, even as crude inventories grow.

The head of the Organization of Petroleum Exporting Countries said Monday that a half-million-barrel-a-day increase to its output quota may be necessary, though he reiterated the cartel's claim that the market is adequately supplied.

Light, sweet crude for May delivery was down 47 cents to $56.80 a barrel in afternoon trade on the New York Mercantile Exchange, where prices climbed as high as $58.28. That topped the previous intraday record of $57.70 a barrel reached Friday, when futures settled at a record $57.27.

With oil prices up nearly $15 a barrel since the year began, U.S. motorists are spending an average of $2.15 per gallon for regular unleaded gasoline and analysts believe pump prices could rise further as the summer driving season approaches.
[...]
While the U.S. supply of crude oil has been growing steadily for more than a month, refiners are expected to draw down those inventories in the weeks ahead as they ramp up gasoline production to meet summer demand, said oil broker Ed Silliere of Energy Merchant Intermarket Futures in New York.
So, OPEC is increasing output, but perhaps too late for the amount of demand they're seeing. I won't get into the fact that OPEC is a cartel (a monopoly) and thus goes against every fundamental principle of free trade & capitalistic theory, but suffice it to say that cheap oil could be had if these countries operated under free market principles.

Finally, the AP story hints that increased prices will be experienced as refineries here in the US will be drawing down on their current inventories as they prepare for the summer driving season. What in the heck does that mean? Why would they draw down on inventory when they expect increased demand during the summer? Easy - they have to burn up their current inventory of "winter gas" which has fewer "environmnetally friendly" additives and then will have to start producing summer gas. Keep in mind that each city in the US has its own blend of gasoline, so the stuff I put into my tank here in St Louis is different than what I'd put in if I were up in Chicago. This added complexity and requirement that refineries "customize" gasoline for individual cities has a lot to do with the increased cost of gas.

So, the Buzzies see a Bush/Cheney/Rove/Guckert motivation behind every little piece of news, but fail to understand the BASICS of the issue at hand. I'm no oil & gas guy... just a guy with a laptop with a business degree. Man, I'll never be able to figure these tools out!

Your Co-Conspirator,
ARC: St Wendeler