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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts
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To: GROUND ZERO™ who wrote (53575)9/23/2000 11:20:52 AM
From: The Phoenix  Read Replies (2) of 63513
 
I'm not sure we all understand the issues with regard to release of oil from the SPR. For sure there is the element of getting Gore elected - no doubt. This WILL have a positive impact on those states that rely on heating oil for the winter. Richardson mentioned average gas prices at $1.57/gallon!! Where? Regular costs over $2.00/gallon in the bay area. So, there is the PERCEPTION that this will ease more price increases and for that reason Gore will get more votes.

Beyond all this there is another issue which is OPEC's seeming stranglehold on oil prices and it's desire to throttle production such that crude prices stay high. Not only does this risk the soveignty of the nation - by allowing foreign governments to affect our ecomony but OPEC, as an organization is, has been, and will continue to be considered an illegal collusive monopoly. The release from the SPR could also be an attempt by the government to control our own destiny/economy by bringing prices down (which this announcement has done) and send a message to OPEC regarding what the US will do to take control of the situation.

Seems to me that the US is one hell of a customer for OPEC. If we decide to release from the SPR and perhaps subsidize domestic production (as gizmo suggested) then OPEC is going to see they're oil <$20 barrel real time. So, the question is what will the do. WIll they play ball or will they suffer the consequences.

Yes, the timing of the release is obviously a political move but the move itself is more than just that - IMUBO

Phoenix
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