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Supply matters – tell Obama

April 11, 2012 04:58

Oil traded near its lowest price in almost two months in New York after an industry report showed stockpiles rose for a third week in the U.S., the world’s biggest consumer of crude. – Bloomberg.com

By Grant Smith and Ben Sharples at Bloomberg.com

EXCERPTS:

U.S. inventories increased by 6.6 million barrels last week, according to the American Petroleum Institute. An Energy Department report today may show they rose by 2 million to the highest level for this time of year since 1990, according to a Bloomberg survey. The U.S. cut its price forecast for domestic and imported grades used by its refiners because of rising output in Canada and North Dakota.

“The fact there is a surplus in the U.S. is borne out by yesterday’s API inventory data,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. He predicts crude will average $104 a barrel this quarter.

FULL ARTICLE

From Mark J. Perry at Carpe Diem:

Supply Matters

From my article in [] Washington Examiner, “Gas prices are complex, but not mysterious“:

Simply put, oil supplies matter. Larger supplies of secure oil — oil that won’t be withheld from the market for political reasons — can result in lower retail gas prices at the pump.

The importance of secure oil cannot be overstated. It’s quite likely that oil and gasoline prices would decline over the long term if more oil were produced domestically and Canadian oil were allowed to flow freely through the rejected Keystone XL pipeline. In fact, just imagine how different the U.S. economy and the energy situation would be today if, 30 years ago, our elected officials had allowed drilling in the oil-rich areas of Alaska, along the West Coast, the East Coast and in the eastern Gulf of Mexico. Instead, they chose to block access to those supplies, keeping us dependent on foreign oil from politically unstable countries.

Our economy runs on oil, and DOE forecasts suggest that oil will be the “fuel of the future” and continue to play an important role in our energy mix for decades to come. It’s time to embrace the facts about oil and discard the “fuel of the past” mentality. There is nothing that provides as much energy bang for the buck as oil. Basic economics tell us that if we had more of it, our bucks would go a lot further.