Ted, Instead, the shortage of gas is due to a shortage of ethanol needed to make the gas blend now required by new federal legislation, complicated by refinery shutdowns for their annual maintenance. Inventories of oil have not been this high in quite some time. Not putting some in the SPR will only contribute to those inventories, not to solving the problem.
So the high price of oil is somewhat manipulated and not due to any real supply shortage?
Manipulated.......because they have to shut down for annual maintenance; because Congress is requiring an new ethanol blend in gas???
There are four major reasons for the high price in oil and two are related. There is the contango effect which prompts companies and countries to have more oil in stock than needed [see the SPR], and there is the geopolitical events in major oil producers........see Iraq, Nigeria, Iran, Venezuela.......which makes oil production uncertain. Third, there is the fear that Peak Oil is nearly upon us. Finally, China has become an emerging nation that is building out its infrastucture at an incredible rate, needing large quantities of all kinds of commodities including oil.
Nearly half my stock portfolio is in commodities.......oil, silver, gold, zinc, graphite and titanium. China is like a huge sponge.
To me, that is good news, since at least we can fix those problems. Even if the solution is (gasp!) ABB.
You can fix Iraq, Nigeria and Iran? That's great.....tell Bush. |
