Is (the IEA intervention) about teaching a lesson to OPEC? I am concerned that this is a factor. The US wanted OPEC to up production. That didn’t happen. So the bad boys who produce oil just got a shot across the bow.
Watch if this angle on the story gets “play”. It would piss off those bad boys and they will retaliate. Does O really think he can take on the world oil market?
-OPEC will respond. “We” will pay a price for this.
Bloomberg has a story out just now that Saudi Arabia is not so happy about this and some cut backs in production just might be in order. From the article:
Oil rose in New York, extending the biggest gain in six weeks, amid concern OPEC may reduce output in response to the International Energy Agency’s move to release oil stockpiles.
“If IEA countries are releasing stockpiles Saudi Arabia won’t increase production as much as expected,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.
“There are concerns Saudi Arabia will cut production” in response to the IEA move, said Roland Stenzel, an oil trader at E&T Energie Handelsgesellschaft mbH, said from Vienna.
Oil is on a tear as a result of this (and other factors). If the end result is that OPEC cuts off production by a percent or two the ultimate cost to global consumers will be measured in the hundreds of billions.
I also said this last week. I’m now certain that I was right:
-Obama will get some egg on his face with this one.
Posts
Several of us disagreed with you about the motivation for the policy (simply politics, re-election).
ReplyDeleteBut no one can argue with you about the consequences, intended and unintended.
As usual, gov't bureaucrats who have never had a job make decisions and the results are unrelated or even negatively correlated with the desired outcome.
Jim,MtnViewCa,USA
Talk about taking a knife to gun fight. Guess what idiots (ie Obama + Advisors); the oil cartels ‘strategic’ reserve is just a wee bit larger than the USA.
ReplyDeleteThe primary purpose of the USA ‘strategic’ reserve is to give us the time we need to go kick some A and take names should the ‘strategic’ need arise. That’s it.
If you want to actually lower the price you need to increase supply ‘outside’ of the influence of this cartel while also reducing our dependence on non-domestic sources of energy in general.
Do agree with you about the consequences. Still maintain that the real impetus for this action was no more than amateur political posturing by the administration.
ReplyDeleteSee the presser today? Obama trying to maneuver so he is perceived as the adult in the debt limit negotiations. MSNBC falling all over themselves to praise the effort. That should be a tip that it is off key.
For the last two and a half years we've suffered under the experiments of a hapless, ideological administration. As they panic and scramble to try and salvage their political futures, the class warfare and reckless actions and charges will only get worse.
Take cover...
do the due diligence. it is what the globalists have planned all along. they are going to screw china, default on the debt and give opec the middle finger. domestic oil reserves are greater here than anywhere in the world, light sweet crude. check the liberty rig in alaska. biggest in history. you have been duped! watch ALL of the ring of power youtube videos this should suffice for now. go deeper down the rabbit hole
ReplyDeleteAnother stupid decision by Obama and his foolish advisors.
ReplyDeleteI don't think any of the above are the motivation for the release.... O knows this will antagonise OPEC and they will cut production....and that is the intended consquence.. He wants to drain your wallet with higher prices...not just piss off OPEC... Its all about making the US a third world country...
ReplyDeleteObama waited for OPEC to up production to lower gas prices. Impatient and impertinent and looking for another opportunity to flex power as he did in Afghanistan, as he had in Libya, he released Fed oil reserves. Why, he can even do this while still looking his usual proud and smart aleck self before TV without any embarrassment. Anyway, he sure does not have the tolerance of an Eisenhower in international affairs. But no one is fooled in the world with his dire arrogance. Rather, much of the devaluating of the dollar is responsible for high oil prices. Such two-faced diplomacy is seen by foreign oil as insincere—to perhaps cause egg or maybe even spit in his face.
ReplyDeleteBruce,
ReplyDeleteThere was nothing substantive in that Bloomberg article. An author was looking to justify a price move in a risk asset in a risk-on environment and quoted some nobody analyst at a third-tier Austrian banking cooperative. There are no references to discussions amongst OPEC policy markets or anything of the like. Let's hear something from the heavies before getting to excited.
Friday's CFTC data also told a very different story.
Regards from your favorite Devil's Advocate
If he really wanted to make an impact with OPEC he should have shot a cruise missile into the Saudi Palace.
ReplyDeleteDid anybody think that one of the "side benefits" of this sale is a bunch of money rolling into the Treasury. Money that doesn't have to borrowed, and thus rise the debt ceiling?
ReplyDelete