Lost in the news today after Standard and Poor downgraded Ford and GM bonds to junk status, was this little gem: White House wants to see oil, gas prices drop
WASHINGTON (Reuters) – The United States wants to see crude oil prices, which have sharply fallen in the past two weeks, slide lower to keep the economy healthy, White House spokesman Scott McClellan said on Thursday.
U.S. crude oil prices have tumbled by more than 58.
“What we want is to continue to see oil prices come down and gas prices come down so that they are more affordable for the American people. And that’s important to sustaining economic growth,” McClellan said. “We have a strong growing economy,” he said.
“But the president is concerned about high energy prices and high gas prices in particular,” McClellan said.
Bush, who met with Saudi Crown Prince Abdullah last week, has been urging oil producing countries to expand production to help ease prices.
McClellan would not answer questions about what the White House believes should be the price of a barrel of oil.
“You know where the price of oil is right now, it’s come down some. And the president wants to see it come down and be more affordable for the American people,” he said. “The government isn’t the one who sets the prices.”
News Flash!! Unless the White House starts selling Crude short in a massive way (momentary relief), lets loose with the Strategic Petroleum Reserve (unlikely, and risky) or increases lasting supply magically, they can whine all they want but prices won’t come down. Besides, what happened to the government’s love of free market economies? Perhaps some policy re-think is in order since, after all, its partly government policy which has landed us in this mess of dependency.
In seperate but related news Rising oil demand could severely strain the world’s oil production and transportation systems late this year, predicts Jim Buckee, chief executive officer of Talisman Energy Inc.:
“The system will be tested,” Mr. Buckee said yesterday after Talisman’s annual meeting. He suggested that projected demand of 86 million barrels of oil a day in the fourth quarter may not be met by enough supply.
While there have been predictions that global oil production eventually will rise past 100 million barrels a day, Mr. Buckee questioned whether the world will ever be able to produce 90 million barrels a day.
The average oil supply this year could be 84.8 million barrels a day, FirstEnergy Capital Corp. said in an April 12 report, up from 83 million last year. Next year’s supply is predicted to be 86.4 million barrels a day.
During the Talisman annual meeting in Calgary, Mr. Buckee said conservation and energy efficiency was the “most important” way to reduce oil demand, adding that widespread use of alternatives to oil and natural gas was “extremely unlikely.”
Dr. Buckee is a smart, very smart, oil man, head of Canada’s 3rd largest independent oil and gas producer. Prices are high enough already, we should take his comments as honest and informed speculation rather than as self-serving.
CLM5; next month contract $2.34 higher!
Crude continues to hold 49 and support and may just surprise us all and make a bottom here at the 50% retracement of the late winter rally. There sure seems to be a heavy bet on the short side – Japan’s commodity exchange shows total open interest almost 3:1 short over long; last available Nymex committment of traders report shows net short position on Crude as well, but is somewhat dated. With so many folks betting against crude, the diabolical scenario is of course higher. We shall see…
05.05.05 16:36 #