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The U.S. Senate Votes to
Suspend Buying Oil
(05/13/08) |
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The Associated Press released an article (read
article) today about the U.S. Senate voting to
suspend buying oil for the federal emergency oil
reserves until the end of the year. While the U.S.
imports about 21 million barrels a day, the 70,000
barrels a day saved by this Senate bill may not have a
big impact on the price of oil immediately; it does
serve to signal to oil producers and oil traders that
the United States is recognizing that there is a problem
with the price of oil and is ready to take action.
Hopefully, this signal will be loud enough to make a
change in world oil supply and demand.
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Looking at how the U.S. housing market saw artificially
inflated housing prices over the last few years which
are now wreaking havoc on the U.S. economy as a whole,
many similarities can be seen with the rapidly
escalating price of oil. These are the same similarities
seen in the dot com boom and bust, and the energy boom
and bust demonstrated best by Enron. Nothing good will
come of these high oil costs for the average consumer or
the U.S. or World economy. The profits will definitely
go to the oil producers and traders and shippers, but
definitely not the end consumer - you and me.
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I
have posted an earlier post about the price of gasoline
(read
here). I noticed yesterday that the price had gone
from $3.60 to $3.69, and summer vacation season is not
even officially here yet!
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The U.S. House has to
vote on suspending oil purchases for the U.S. oil
reserves. The consensus is that the House will pass the
bill. President Bush, however, has already stated that
he is not in favor of the bill. Big surprise there being
that his family and friends and lobbyist friends make
billions of dollars in profits on oil at the end
consumer's expense. With a veto from the President, the
oil reserve purchases will continue. I have little doubt
that this will be the outcome. The good thing is though
that the U.S. Legislative Branch has at least tried to
send a message and oil producers and providers have
already heard it with this week's vote... even despite
President Bush's veto.
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