There was a flurry of excitement in the oil market this afternoon when it appeared that France had decided to release oil from its strategic reserve. The truth was less dramatic: the government was actually releasing 285,000 tonnes - about 2m barrels - of diesel and heating oil to offset problems at two refineries, and the oil was not coming from its strategic petroleum reserve.
All the same, the story raised the question of whether, given all the talk about whether today's oil price is a speculative bubble, US and other governments should release enough oil from their reserves to give the speculators a bloody nose. If they succeed, they can replenish their stockpiles at much lower prices....MORE
Should Bush open up the oil spigot?
Massachusetts Democrat Edward Markey, chairman of the House Select Committee on Energy Independence and Global Warming, held a press conference on Friday. His main purpose: bashing the Bush administration over the head with the handy club of oil prices. In between pointing out how the price of a barrel of oil had risen from $26, when George Bush took office, to almost $96 today, he also called for the president to send a message to "energy speculators" by allowing the release of crude oil from the Strategic Petroleum Reserve (SPR).
I think that the president must send a signal to the markets that he is not going to allow the speculators to determine the price of home heating oil and gasoline for all Americans.
Just by saying that he is going to release oil from the Strategic Petroleum Reserve, it would send a signal to all of those who believe that the Bush administration is going to keep its hands off of the oil marketplace, that he is interested in protecting consumers.
And once that happens, you'll see a dramatic drop in the price of oil on the open market. Otherwise, the speculators will be king and the consumer will be the victim.>>>MORE