2 Responses to “Bush says drill, removes executive ban on offshore drilling”

1. Anonymous Says:
   July 17th, 2008 at 11:05 am

   If the market price ended up a couple dollars, would you have connected it to the President’s actions too?

   The President’s announcement had no effect on the price that I can tell. Everyone know’s it means nothing by itself, Congress isn’t going to do anything this year or next (democrats may come around in 2010 before the elections if the prices get high enough, but remember, Obama isn’t going to allow it if he gets elected), and it will take years for actual production.

2. Daniel Swanson Says:
   July 18th, 2008 at 6:24 pm

   I agree with you for everything but the last half-sentence “and it will take years for actual production”.

   The oil futures market is part of the reason prices are going so high. If the futures go up (betting that supply will go down) the price will go up (more people buying into the commodity). So, if the future of oil looked to have greater supply to meet demand, futures would go down, so prices would go down (more people selling out of the commodity).

   This particular commodity (oil) has seen drastic shifts in prices and commodity trading. I should know, I’m from Oklahoma. We are a state that goes boom when the rest go bust and the opposite is also true. When the oil embargo was lifted in the early 80’s, and when President Reagan deregulated much of the energy industry, the bottom fell out on oil, no matter if the actual oil didn’t reach the market for months or even years.

   It does matter that Bush did this, at the very least it helps. It signals oil investors that a lot more supply is about to be opened to them, and that the political wind on this issue is behind it.

Comments