Gas prices and the SPR

Should we stop filling reserve until prices fall?

Airborne Combat Engineer asks the question. He’s got a point, of course. He quotes a Christian Science Monitor story on oil prices:

The US, in fact, is continuing to buy oil for its Strategic Petroleum Reserve. Some analysts believe the US is adding between 50 cents and $1 to the price of crude with its program, which is taking in 125,000 barrels of oil per day. Some members of Congress have pressed the administration to suspend the buying while the price remains high. [Energy analyst Adam] Sieminski thinks suspending the program makes sense: “Why are we buying oil at $40 a barrel when most people think it’s going back to $30 a barrel?”

The answer obvious to most will be that Bush is either a lying crook or a puppet of Big Oil. Or both. I wrote a few weeks ago about our ability to manipulate the price of gas, and I noted the SPR:

And remember, Bush may want to fill the Reserve for reasons other than lining his friends’ pockets. Maybe he knows something we don’t about the availability of oil in the near future. Like if there were to be, say, “issues” with Saudi Arabia or a conflict in Iran. Please note that I’m not predicting these things or suggesting that the refilling of the SPR indicates that they are on the horizon, just that the President might have a specific reason in mind and he is not doing it “just in case.”

Maybe something is coming down the pike that will significantly alter the availability of crude oil, and maybe the government knows it’s coming? Maybe the government is going to be making it happen? Like paying a visit to, or at least a change in policy toward, our friends in some of the countries bordering Iraq?

I’m not predicting this sort of thing. I’m just thinking that if it were coming, and we knew it were coming, we’d keep pumping into the Reserve like there’s no tomorrow. Because there might not be.

Just a thought.

Another thought that occurs to me is that this could all be a ploy by Bush, Cheney, and Big Oil to pressure folks to ease back on the environmental restrictions that have prevented new refineries or oil wells in Alaska from being built. Everyone loves their planet, but not if it means they can’t drive their SUV.


  1. If you look at the amount of oil being putout and the amount being used the actual price of oil would be around $30 a barrel. However, the price we are seeing on the market is brought about by speculators. They are buying up oil futures at between $38 and $40 a barrel betting that because of the conflict in the region the supply will drop and their contracts will actually be worth more. I personally hope the price drops and these guys lose their shorts. Brass.