One more OT, RE: oil.
The Strategic Oil Reserve release will affect prices short term, but nothing more. The energy market is still faced with the problem of a year ago that there was insufficient investment in capacity. Clinton cannot do anything about that. And OPEC is producing at capacity right now. If Saudi Arabia had excess capacity, they would have used it to keep prices closer to $30. It's in their on self interest. As it stands, last month OPEC couldn't even produce what the quotas were, much less cheat.
Exacerbating that problem is that domestic E&P companies are still reluctant to expand exploration, primarily because everyone remembers '96, when many made a very poor decision to aggressively ramp budgets.
Bill, there are some serious imbalances in the oil and gas business right now. 30mm extra barrels will cure the current shortage, but do nothing to alleviate the capacity crunch throughout the business.
edit: One other thought--The major shortage going on right now is of natural gas, not crude oil. And there's nothing that can be done about that, save for more drilling, and a longer term shift in demand patters. |
