"The Bush plan is a hoax,"

“The Bush plan is a hoax,” responded House Speaker Nancy Pelosi. “It will neither reduce gas prices nor increase energy independence.” This was in response to President Bush lifting the ban on off shore oil drilling (AP story here)

Do you think Nancy Pelosi is eating those words yet?

If you recall in a previous post I pointed out that since the Democrats took power in Jan of 2007 oil and gas prices have continued to rise…yet this “hoax” has yielded an immediate response from the market, in particular those “pesky” speculators! The cost of oil has dropped $19 in one week!!!

They realize that if the US just begins to tap some of the oil that is available there will be a small but noticeable easing of demand.

Lets face it $1.00 gas is probably gone forever but there is no reason why we shouldn’t be trying to minimize the upward cost of a vital staple in the world economy! If we tap the known sources of oil there will be more supply to accommodate the ever increasing demand for oil. This will not be a permanent fix but it could help relieve the pricing pressure for the next 15-30 years while viable alternatives can be sought.

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6 comments so far

  1. steveegg on

    And here’s the kicker; that price drop survived a Category 2 hurricane.

  2. Kerbouchard on

    lol, you guys are on crack if you think the Bush annoucement had anything to do with the drop in Crude. While I appreciate your support of the Republican party, and although I realize that if oil prices went up, the Left would spin that as a win… it doesn’t mean you have to do the opposite

    For someone who is an auditor and whose job it is to keep an open mind, be unbiased, and stick strictly to the facts… this post is seriously lacking.

    The Bush annoucement has had Zero effect on the decline in price of crude.

  3. gopfolk on

    But the increase in crude is due to Bush?

    One of my past careers was as a broker and I still pay attention to the markets and to say that Bush’s comments have nothing to do with the lowering of price is the ridiculous statement.

    Commodity speculators look for anything that would/could indicate a change in supply or demand of the product. Saying that we are going to re-open drilling in the US when the USGS has pointed out that we are sitting on the largest deposit of oil shale in the world…would have an impact on the price of crude.

    As for your retort about my job…this isn’t my job, therefore I’m entitled to my opinion…but since you brought it up:

    Fact: Cost of crude has been increasing dramatically over the past few months due to limited supply and increasing demand
    Fact: July 14th Bush announces that he will lift the ban on drilling in the US
    Fact: July 16th the price of crude begins to fall and has continued to fall for over a week
    Fact: There has been on other major announcements that would/could lead to an easing of supply or demand

    Therefore my opinion is valid.

    If I am missing something please let me know.

  4. Kerbouchard on

    “But the increase in crude is due to Bush?”

    Nope. That’s just as foolish a thought.

    “One of my past careers was as a broker and I still pay attention to the markets and to say that Bush’s comments have nothing to do with the lowering of price is the ridiculous statement.”

    lol. Was an Economics class a requirement for this position?

    “Fact: There has been no other major announcements that would/could lead to an easing of supply or demand”

    Absolutely False. Wow… where to start…

    Fact: Oil is used as a Hedge against a falling dollar.

    Fact: On, July 15th the EUR/USD exchange rate was 1.599 = an ALL-TIME high. “ALL-TIME” In other words.. The US Dollar has NEVER been weaker than it was on July 15th!

    Fact: Today, July 25th, the EUR/USD exchange rate is 1.5734 which is a major change from July 15th in currency terms.

    Fact: Since Oil is used as a Hedge against a falling dollar, when the dollar gains strength the price of Crude drops significantly… Econ 101.

    Fact: It was recently reported that both gasoline and crude inventories have risen to moderately higher levels than anyone expected.

    Fact: An increase in gasoline and crude inventories signals a slowing demand and increasing supply – the inverse of your first “fact” which is another reason why Crude has fallen sharply as this recent revelation bucks the trend that has occurred over the last few months.

    Fact: Immediately after Bush made his statement, the Democratic Congress led by Pelosi made it NO secret that they did not intend, whatsoever, to reciprocate Bush’s action.

    Fact: Speculators are in the market to make money. As soon as it was clear that Congress would not act, they would have put their money back into the game if that was the only reason they were selling in the first place. So, clearly, the Bush comment (even if it had an effect) would have been very short-lived.

    Fact: Huricane Dolly’s path (which is more easy to predict than the strength) was forecasted to miss all drilling and refining infrastructure in the Gulf. Therefore, the risk premium was removed.

    Fact: The Iran situation was showing significant progress in the week after the Bush comment (as the US made a first-of-kind diplomatic gesture), and that led to a decrease in the risk-premium that the US/Iran Israel/Iran relations has on the price of Crude.

    Your theory makes absolutely zero economic sense, and is not at all realistic. It is a political stunt to deceive people that don’t know any better.

    Shame on you.

  5. gopfolk on

    Let me start by saying: Well done!

    “Your theory makes absolutely zero economic sense,”

    Now you’re catching on…

    “It is a political stunt…”

    YEP!

    “…to deceive people that don’t know any better.”

    Now there is where I take issue.

    How long did it take you to look up this information? 2 minutes? 5-10 if you are weak on economics or using a search engine?

    If you are smart enough to read a blog…then you should be smart enough to look up the information that is posted on a blog entitled “One Man’s Opinion.”

    I’m tired of the crap that is spewed in the media and is claimed to be truth or as both of us used FACT. I asked you about the “increase in crude (is) due to Bush” while you acknowledged it is not…pick up the paper and every day they are blaming Bush for the rise in the price of crude…it does not make sense!

    To be blunt if they can claim it one way and justify it I can claim it the other…and justify it.

    That’s my opinion…

    “Shame on you.”

    Oh well! ;^)

  6. Kerbouchard on

    “I’m tired of the crap that is spewed in the media and is claimed to be truth or as both of us used FACT. I asked you about the “increase in crude (is) due to Bush” while you acknowledged it is not…pick up the paper and every day they are blaming Bush for the rise in the price of crude…it does not make sense! “

    hahaha, ok – now we are in complete agreement! 😉

    I’m still not sure it’s right though – but I concede – it’s your opinion… and the Left certainly does it just as often as you suggest.


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