Friday, June 24, 2011

Libya or Politics, Selling Oil Reserves Win for Consumers

This is not really a Libya story, though the White House would like it to be.

The surprise move to put on the market 60 million barrels of oil gave the financial markets a boost and will likely help some middle class Americans load up the beach wagon and give their families a vacation after all.

Mostly it left President Obama's political enemies here at home red-faced over the mostly symbolic move -- 60 million barrels would fuel the world for less than a day.

Still, Obama's political detractors know they cannot really attack a program that ultimately is meant to help American consumers. The Democrats would love nothing more than to run ads of Republicans squeaking about how wrong it is to try lower prices at the pumps.

The best the yammerers at Fox could do is bloviate about the need to tap more oil wells, even though U.S. oil fields are more active than they have been in 20 years. So that line of attack is not impressive for the bomb-lobbing reputed house organ of the GOP and Tea Party.

But more importantly, it left OPEC wondering what else the U.S. and the International Energy Agency have up their sleeve to fight back against their price gouging. Iran, which is trying to wrest the de facto seat at the head of the oil cartel away from U.S. ally Saudi Arabia, was out-smarted, at least for a little while. Iran is taking the lead in opposing oil output.

As for the crooked oil marketeers here in the U.S., the Justice Department is looking under every stone for the slimy greed monsters who would stick it to Americans for the sake of profits. Attorney General Eric Holder would love to make an example of a gasoline distributor rip-off artist.

The U.S. and IEA blame the shutdown of Libya's oil production as the biggest reason for flooding the oil markets with the reserves. It will likely be at least a month before Libya's refineries are fired up again and the rebels are able to ship oil.

"We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," Energy Secretary Steven Chu said.

Even if it is a bit of a "dog ate my homework" excuse, it will likely take the heat off the cash-strapped middle class Americans and how can anyone in the U.S. complain about that.

No comments:

Post a Comment