You're past couple of posts on this have been good and right on the verge of saying... demand. There, I said it.
That's not the way I saw it. There was an explosion in announcements and oil coming out of the woodwork just before the collapse. Although the fiancial collapse was also a major contributor. Either way, that spells bad news for Obama.
You have to say this, because the supply premise is all you have for your argument that Obama is causing high oil (and so gasoline) prices. That premise is false and your conclusion is false.
The small amount that we could change the price of oil through drilling will always be offset by the amount the dollar is going down the shitter. I will never make the attempt to say that Obamas lack of drilling has much to do with oil prices. The reason I blame him, Geithner Bernanke, Bush, and Greenspan, is because the three of them are destroying the US dollar. The solution in my opinion would be to quit turning the dollar into toilet paper. If we were drilling at full capacity, at the same time Obama Geithner, and Bernanke were attempting to strengthen the dollar then there could be a change in what we pay at the pump, but drilling for more oil is an excercise in futility if they are set on crushing the dollar at the same time. Total world demand is about 85 million barrells per day right now. In 1990 at the peak of U.S. oil production we were taking 2 million barrells per day out of Alaska. So even if we tripled the current 1 million we are taking out of Alaska all we would be doing is getting 2 million extra barrels of oil per day. Lets say we found another 2 million somewhere else, that would mean we managed to add 4 million barrells a day to world oil production. That is only 5% of the daily (85 million barrel)demand for oil if we went all out, meaning we might be able to bring the cost of a barrel of oil down by about 5 dollars. If this takes us 2 more years to get to that level the dollar will have lost more then 5% of its value in that time. So yeah we basically have no control over the price of oil, while the politicians are implementing a weak dollar policy.
Well said. Everyone in the oil and gas sector understands that if you really want to bring the price of gasoline down you need to build more refinery capacity. That's where our leverage would be, as oil is less than half of the cost of gasoline. But refineries are expensive, no one wants one in their backyard, and gasoline is already such a low margin business it just isn't worth it.
Yes, the dollar is a huge factor in oil prices. But the dollar is just slightly lower than where it was when Obama took office. http://www.poweryourinvestment.com/wp-content/uploads/2011/03/Dollar-Index-Analysis.png Everything has to be taking into account, dollar value, dollar direction, supplies, future supply change, etc. etc. Much of this is a result of administration policy. Drilling does matter and is a large part of price discovery. As far as refineries, a refinery cannot be built in the U.S. right now because of the massive government regulations required. Existing refineries have been able to expand to meet needs but the government requires a bunch of different blends which makes for shortages here and there. Just another piece of government meddling that works against us.