Bush Says Drill, Oil Prices Drop 6.3%
In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.
Now isn’t this interesting?
Democrats keep saying that it will take 10 years or longer to produce oil from the offshore areas. And they say that oil prices won’t decline for at least that long. And they, along with Obama and McCain, bash so-called oil speculators. And today we had a real-world example as to why they are wrong. All of them. Reid, Pelosi, Obama, McCain — all of them.
Traders took a look at a feisty and aggressive George Bush and started selling the market well before a single new drop of oil has been lifted. What does this tell us? Well, if Congress moves to seal the deal, oil prices will probably keep on falling. That’s the way traders work. They discount the future. Psychology and expectations can turn on a dime.
I read somewhere earlier this week (can’t find it now) that watching Congress deal with energy issues was like watching Larry, Moe and Curly teaching calculus in a cream pie factory. That’s so true it’s scary.
What’s amazing is that Congress is struggling so hard to “solve” a problem they don’t really need to solve themselves at all. All they need to do is get out of the way of the people who can solve it. Namely, energy producers.
If the politicians would just shut up and get out of the way of the people who actually produce the energy (and quit using subsidies and the tax codes to play favorites among them) this country wouldn’t have an energy problem.
