McCain credits Bush for drop in oil price

Republican John McCain on Wednesday credited the recent $10-a-barrel drop in the price of oil to President Bush's lifting of a presidential ban on offshore drilling, an action he has been advocating in his presidential campaign.

The cost of oil and gasoline is "on everybody's mind in this room," McCain told a town-hall meeting.

He criticized Democratic rival Barack Obama for opposing drilling on the Outer Continental Shelf.

Bush recently lifted the executive order banning offshore drilling that his father put in place in 1990. He also asked Congress to lift its own moratorium on oil exploration on the outer continental shelf which includes coastal waters as close as three miles from shore.

"The price of oil dropped $10 a barrel," said McCain, who argued that the psychology of lifting the ban has affected world markets.

The White House didn't go that far. Presidential spokeswoman Dana Perino said the price drop also could reflect diminished demand.

"I don't know if we fully deserve the credit," Perino said.

"We don't predict what happens in the market," she said. "We can't really tell. Certainly, taking that action would send a signal that at least the executive branch is serious about moving forward and increasing the supply we have in America."

There are 42 gallons in each barrel.

A barrel of light, sweet crude fell $1.86 to $126.56 on the New York Mercantile Exchange. That's down from more than $140 a barrel earlier in the summer.
McCain credits Bush for drop in oil price - Yahoo! News

I agree with McCain on this one. As soon as Bush made the announcement the prices fell. Imagine what the price would drop to if congress were to make the same obligation? :thumbsup:

Mark my words....the reason McCain will win in November will be based on the price of fuel and the position that Obama takes on drilling for oil and nuclear power.:D

Have a good one!:s4:

Magoo is a knobend (evidently, it has more to do with Bush's numerous recent conjugal visits to the gimp lair of one King Abdullah bin Abdul Aziz Al Saud, Custodian of the Two Holy Mosques and Big Boss of Leathersex Central, High Street, Riyadh).

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Originally Posted by ralphbuick

Magoo is a knobend (evidently, it has more to do with Bush's numerous recent conjugal visits to the gimp lair of one King Abdullah bin Abdul Aziz Al Saud, Custodian of the Two Holy Mosques and Big Boss of Leathersex Central, High Street, Riyadh).

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Well, said! I wasn't going to give Bush any credit at all for the drop in oil prices based on his push for raping our coasts, but if he's managed to swing a deal by peddling his tail in the Arabian luv harems, then I'll give him his props! Heckuva job Georgie! Shake yer money maker!

Saudi officials have consistently said the country would provide enough oil to supply the market. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the Jiddah meeting that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels.
Saudi Arabia said it will boost oil production, but experts say it falls short of lower US gas prices

Oil shale in Colorado, Utah and Wyoming could yield 800 billion barrels of oil for the global market. That is more than the proven reserves of Saudi Arabia and certainly enough to help drive down gas prices in America. But political posturing has prevented us from even beginning to plan how we can utilize this resource.
Skewed logic over oil shale - The Denver Post

The federal government estimates the nation's outer continental shelf might hold 85.9 billion barrels of crude, including 10.13 billion barrels off California. For comparison, the United States consumes about 7.56 billion barrels of oil per year. The nation's sea floor also could hold 419.9 trillion cubic feet of natural gas, equal to U.S. consumption for 14 1/2 years. But the federal estimates are just that - estimates.
The lowdown on offshore oil reserves

What more can be said? The numbers speak for themselves......

Have a good one!:s4:

I thought it would take us at least 7 to 10 years before we could even start using that oil?

This pullback in oil is just a breather. By the end of the year we will see 200 a barrel.

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Originally Posted by epxroot

I thought it would take us at least 7 to 10 years before we could even start using that oil?

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I believe they've said it would normally take 7-10 but they are able to expedite it to 3-4 years. During that time the government should put more money into alternative energy; which honestly is something they should've done during the first oil crisis in the 70's.

Hopefully we will be able to curb the inflated rates of oil while seeking to become independant of oil all together.

I do believe Bush deserves some credit, but I think it's marginal. If congress does their part then we'll see how much offshore drilling would help drive the prices down.

this is just disgusting. Am I the only one to see what happened to the Mississippi River? These are the risks intrinsic to oil drilling, and one of the main reasons more drilling is not the answer. Anyone that would sacrifice our planet (or even our country) for the sake of lower gas prices needs to have their Humanity Card revoked. Drilling is not the answer.

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Originally Posted by LegalizeTheGreen

this is just disgusting. Am I the only one to see what happened to the Mississippi River? These are the risks intrinsic to oil drilling, and one of the main reasons more drilling is not the answer. Anyone that would sacrifice our planet (or even our country) for the sake of lower gas prices needs to have their Humanity Card revoked. Drilling is not the answer.

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I take it you are referring to this?

Spill could close part of Mississippi River for days - CNN.com

This actually has nothing to do with drilling, but it does have to do with oil.

Or are you talking about the flooding.. which also has nothing to do with drilling or oil?

If we had a knee jerk reaction everytime something bad happened in the name of society and progress then we would never have any advancement.

If your argument is that drilling is damaging the mississippi river then I would have to argue that drilling was not the cause of the spill. If your argument is that drilling for oil is dangerous because it could risk spilling oil and harming the environment then I would have to say you're right, except you need to be realistic and reference how many times Oil has been safely transported compared to how many times we've actually had an Oil Spill. You can't deny the world energy because you're scared of a spill that may or may not happen. It may not be the most idealistic thing to do in terms of our home, the earth, but it's a need that we have and will need to be weened off of.

Energy/oil is a need of the world. This is not something that any politician can make up or refute. This is also not just a problem for the United States but rather a GLOBAL problem.

Drilling may not be the end solution but neither is alternative Energy. Currently technology is not where we need it to be to ween us off oil. Even when all of our automobiles are electric or hydrogen or whatever technology they decide to use becomes availale.. there will still be a large need for oil. Alternative energy is not cheap and it does not come quickly either. It takes time to build hydrogen filling stations or electric charging stations for vehicles. There is much more logistical problems when you start to think about how do you transition from oil to alternative energy.

It's not just a light switch that you can flip on and off. We need to aid the world oil market while at the same time researching alternative energies to relieve of us from our dependance from oil.

I am pro alternative energy but I am also realistic in how long it would take to get all of America on the same page. Unfortunatley because of the time table I would have to say we have no choice but to use a combination of drilling and heavy funding into research. Something we should have done during the first oil crisis in the 70's.

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Originally Posted by daihashi

I believe they've said it would normally take 7-10 but they are able to expedite it to 3-4 years. During that time the government should put more money into alternative energy; which honestly is something they should've done during the first oil crisis in the 70's.

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I've even seen reports on t.v. that stated one year within 15 miles of the coast. Fact is if we had the green light on this it would drive speculators out of the market. They said speculation was worth $60/barrel.....that would bring it down to $80/barrel from the $140 mark that it was.

Have a good one!:s4:

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Originally Posted by Psycho4Bud

I've even seen reports on t.v. that stated one year within 15 miles of the coast. Fact is if we had the green light on this it would drive speculators out of the market. They said speculation was worth $60/barrel.....that would bring it down to $80/barrel from the $140 mark that it was.

Have a good one!:s4:

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Wow.. $60/barrel. I hadn't actually heard a figure on what inflation speculation was worth. That is insane, that is about 40% of the current value of a barrel.

Let's hope congress votes on this... Let's also hope that our government doesn't lose sight of what's important and still continue to research alternatives fuels/energy so we don't run into this mess again.

More drilling is just going to delay our problems. We will have to use renewable energy for everything sooner or later. Why keep putting off the solution?

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Originally Posted by apocolips31

More drilling is just going to delay our problems. We will have to use renewable energy for everything sooner or later. Why keep putting off the solution?

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Exactly. We've known oil was problematic and the supply unreliable for 35 years. Kicking this down the road another 10 years is not going to help. We need to move aggressively to the energy resources of the future now. Immediately.

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Originally Posted by dragonrider

Exactly. We've known oil was problematic and the supply unreliable for 35 years. Kicking this down the road another 10 years is not going to help. We need to move aggressively to the energy resources of the future now. Immediately.

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So you don't think that curbing the rising oil costs until we can create **affordable** alternative energy will help?

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Originally Posted by daihashi

So you don't think that curbing the rising oil costs until we can create **affordable** alternative energy will help?

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I'm all for curbing rising oil costs in the meantime. Doing so would definitely help. But I am not for offshore oil drilling or drilling in ANWAR. I don't believe that would affect oil prices significantly. I think it is a ploy to use the high price of oil to secure leases for the oil industry that would otherwise be out of reach --- it's not about saving you and me gas prices --- it's about securing currently off-limits resources for the oil industry.

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Originally Posted by dragonrider

I'm all for curbing rising oil costs in the meantime. Doing so would definitely help. But I am not for offshore oil drilling or drilling in ANWAR. I don't believe that would affect oil prices significantly. I think it is a ploy to use the high price of oil to secure leases for the oil industry that would otherwise be out of reach --- it's not about saving you and me gas prices --- it's about securing currently off-limits resources for the oil industry.

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We'll see. I'm fairly sure that drilling will get approved and if prices go down then we'll know drilling is responsible, if it continues to rise then we'll know it didn't help. If drilling doesn't get approved then we'll never know the answer.

Only time will tell now. :thumbsup:

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Originally Posted by daihashi

We'll see. I'm fairly sure that drilling will get approved and if prices go down then we'll know drilling is responsible, if it continues to rise then we'll know it didn't help. If drilling doesn't get approved then we'll never know the answer.

Only time will tell now. :thumbsup:

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Yes, only time will tell. I'm hoping the offshore drilling does not get approved and I do not think it will.

I do not attribute the recent decline in oil prices to Bush lifting the presidential ban --- I think the world economy is begining to slow.

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Originally Posted by apocolips31

More drilling is just going to delay our problems. We will have to use renewable energy for everything sooner or later. Why keep putting off the solution?

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I agree with ya on NOT putting off the solution. Other resources should be explored and implemented A.S.A.P. but untill then, whats wrong with doing what we know how to do now to boost the economy and give joe public a break at the pumps? Can't we do all these things?

Reminds me of when I worked for a company doing industrial sales. We had to have a new computor system so what did they do? Not a gradual transition but a complete shift over. Turned out to be a MAJOR cluster fuck! We're currently based on fossil fuels...wouldn't a gradual transition to other means of energy be a bit more in line?

Have a good one!:s4:

They have absolute control of it; they lower it when they need brownie points. If I've previously read correctly, nothing will even happen due to lifting that until congress takes action..It'll be back to 3.79 soon enough.

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Originally Posted by Psycho4Bud

Reminds me of when I worked for a company doing industrial sales. We had to have a new computor system so what did they do? Not a gradual transition but a complete shift over. Turned out to be a MAJOR cluster fuck! We're currently based on fossil fuels...wouldn't a gradual transition to other means of energy be a bit more in line?

Have a good one!:s4:

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I work in the technology industry.. and the oil industry. Let me tell you in each situation doing a complete shift over is almost always disasterous. There are tons of logistics and fall back plans you have to put into place before you even make a minor change to a Network.

Imagine trying to change the ever growing population from oil to alternative energy in 1 day....

Right now we just dont' have the infrastructure to support an immediate flip over to alternative fuel sources. I am baffled how people are blind to see this. They demand NOW NOW NOW... but what are they going to do when they get their new alternative fuel car with no station to fuel up at.. or only a station like once every 50-60 miles?

Then there is the technology shift.. who are going to support and maintain these cars if the technology were to just change over night?

Then there's the potential dangers to be worked out. Naturally there will be problems with these cars during the first few generations of production. Honestly that's just the way it is. Rarely do things go EXACTLY as you plan. Who wants to drive in a mass produced car they don't feel safe in?

There's the cost to produce the technology. I believe a hydrogen fuel cell currently costs around 1 million dollars just for the fuel cell. If you want to discuss electric cars then we can also discuss the negative impact that would have due to future upcoming events that will effect our electricity supply as well as blackouts which we've had a history of occuring within the united states before.

There are just many logistics to be worked out that it simply isn't possible to do this at the flip of a switch like everyone suggest. And it pains me to hear people being so demanding because all I envision are my fellow Americans that do this as being that kid that we all see in the mall or the store that stomps his feet if he doesn't get that candy bar that he wants. Since when did we become so unreasonable that we became comparable to whining 5 year olds?

We should be critical of our government. Absolutely!!! but we should also be reasonable in our demands.

:thumbsup:

No one has suggested that we need to switch our entire infrastructure over to alternative energy sources immediately or that it would even be possible to do so. Only that we need to BEGIN immediately. It will take years to completely switch over, and we need to start now. My argument is that lifting the ban on offshore drilling and drilling in ANWAR will do almost nothing to ease that transition. Those resources, if brought completely on line, would amount to a small fraction of our total energy usage. You could affect the energy market in the same positive way by switching an equivalent small percentage of our energy use to an alternaive source. It would take years to gain any benefit from new offshore leases or ANWAR leases, so I think it is practical to think we could switch an equivalent fraction of our energy usage to an alternative in the same time frame.

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Originally Posted by dragonrider

My argument is that lifting the ban on offshore drilling and drilling in ANWAR will do almost nothing to ease that transition

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I don't see how you can state that when just having Bush lift the Presidential ban dropped the price of crude by $15 per barrel.

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Originally Posted by dragonrider

Those resources, if brought completely on line, would amount to a small fraction of our total energy usage.

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Originally Posted by Psycho4Bud

Oil shale in Colorado, Utah and Wyoming could yield 800 billion barrels of oil for the global market. That is more than the proven reserves of Saudi Arabia and certainly enough to help drive down gas prices in America. But political posturing has prevented us from even beginning to plan how we can utilize this resource.
Skewed logic over oil shale - The Denver Post

The federal government estimates the nation's outer continental shelf might hold 85.9 billion barrels of crude, including 10.13 billion barrels off California. For comparison, the United States consumes about 7.56 billion barrels of oil per year. The nation's sea floor also could hold 419.9 trillion cubic feet of natural gas, equal to U.S. consumption for 14 1/2 years. But the federal estimates are just that - estimates.
The lowdown on offshore oil reserves

What more can be said? The numbers speak for themselves......

Have a good one!:s4:

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Once again, the numbers speak for themselves.

Have a good one!:s4:

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Originally Posted by Psycho4Bud

I don't see how you can state that when just having Bush lift the Presidential ban dropped the price of crude by $15 per barrel.

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I can state it bacause I do not believe the price dropped in response to Bush lifting the Presidential ban.

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Originally Posted by Psycho4Bud

Once again, the numbers speak for themselves.

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If you read the article you linked to for those numbers. It says that of that 85.9 billion barrels of crude that MIGHT be held in the outer continental shelf, 75% is already in areas being actively drilled or open to exploration. The ban affects possibly 21 billion barrels that MIGHT be there. It's not worth it.

Your article also had this to say:

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In addition, offshore oil exploration is slow and costly.

If the federal government opened California's coast to drilling tomorrow, the first exploratory wells probably wouldn't be drilled for at least six years, Medlock said. Bringing newly discovered oil fields into full production would take longer.

That means any new oil wouldn't arrive on the market until midway through the next decade, at the earliest. The process is slow enough that the Energy Information Administration, the statistics branch of the U.S. Department of Energy, estimated last year that opening the coasts to offshore drilling would have no significant impact on oil prices before 2030.

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I'm thinking that if we got started now, maybe we could have a better solution in place by 2030 wthout endangering our coasts to tap the last 25% of our estimated reserves.

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Originally Posted by epxroot

I thought it would take us at least 7 to 10 years before we could even start using that oil?

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Lowered the price didn't it?

Although this is only band-aid.

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Originally Posted by Psycho4Bud

I've even seen reports on t.v. that stated one year within 15 miles of the coast. Fact is if we had the green light on this it would drive speculators out of the market. They said speculation was worth $60/barrel.....that would bring it down to $80/barrel from the $140 mark that it was.

Have a good one!:s4:

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Originally Posted by daihashi

Wow.. $60/barrel. I hadn't actually heard a figure on what inflation speculation was worth. That is insane, that is about 40% of the current value of a barrel.

Let's hope congress votes on this... Let's also hope that our government doesn't lose sight of what's important and still continue to research alternatives fuels/energy so we don't run into this mess again.

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Someone has got to explain to me how this futures market works and how it affects today's spot price. I thought the whole point of futures contracts was to accurately know the future price of a commodity based on future supply and demand predictions, or eliminate the risk of not knowing. How does runaway speculation affect that? Why would anyone buy a futures contract saying "I agree to buy a barrel of oil next year for $130 dollars" if predicted supply and demand say a barrel should only be $70 next year? How does that work? Seems like the market would just correct that out pretty quickly. And if supply and demand say that today a barrel should go for $70, then how does a futures contract for a future barrel of oil change today's price? I don't see how that works at all.

I know I don't know enough about how future's trading works, but it seems like bubbles would not be such a big problem and would rapidly self-correct, and I definitely don't see how it affects today's price.

I am thinking that today's high price is probably NOT due to some kind of futures bubble that has somehow added a 40% premium onto the supply-and-demand price of oil. That just seems like such a huge market distortion for such a heavily traded high-volume commodity that it would have to collapse.

Does anyone know how this works and can explain it to me?

When oil supplies dwindle and they forsee a demand in oil going up, it'll drive the price of oil futures. Since oil is a non-renewable resource, there is expectation that the price would continue to go up. Oil futures sends signals to the physical market because after all, it's correlated. If speculators think that they'll be less supplies, they'll continue to increase the value of oil as a commodity, making it a profitable investment.

When there is news that increases the oil supply, the wagers go from up to down. The futures market is simply that speculation. Bush temporarily changed the expectations.

Though the futures market effect on oil price is limited, but none the less apart. It's not a long-term solution, a simple band-aid.

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Originally Posted by dragonrider

Someone has got to explain to me how this futures market works and how it affects today's spot price. I thought the whole point of futures contracts was to accurately know the future price of a commodity based on future supply and demand predictions, or eliminate the risk of not knowing. How does runaway speculation affect that? Why would anyone buy a futures contract saying "I agree to buy a barrel of oil next year for $130 dollars" if predicted supply and demand say a barrel should only be $70 next year? How does that work? Seems like the market would just correct that out pretty quickly. And if supply and demand say that today a barrel should go for $70, then how does a futures contract for a future barrel of oil change today's price? I don't see how that works at all.

I know I don't know enough about how future's trading works, but it seems like bubbles would not be such a big problem and would rapidly self-correct, and I definitely don't see how it affects today's price.

I am thinking that today's high price is probably NOT due to some kind of futures bubble that has somehow added a 40% premium onto the supply-and-demand price of oil. That just seems like such a huge market distortion for such a heavily traded high-volume commodity that it would have to collapse.

Does anyone know how this works and can explain it to me?

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The top CEOs of U.S. companies such as AMR Corp.'s American Airlines, Delta Air Lines Inc., Continental Airlines Inc. and US Airways Group Inc. this week asked their customers to press Congress to rein in speculation, which they say could contribute between $30 and $60 a barrel to current oil prices trading near $140.
Free Preview - WSJ.com

From what I've heard on t.v. and read there are MANY oil tankers off our coast at the present time filled with crude that's already accounted for or bought through speculation. Since this is removed from the supply side we have our increase. I guess there are many firms putting their retirement funds into this since it is so much of a money maker at this time. Let congress vote in a measure to allow drilling and these people will run for the hills.:thumbsup:

Do a google search on "Oil Speculation"....maybe you can find some better info than this on the subject. If so, please share for the rest of us!:thumbsup:

Have a good one!:s4:

Some people are claiming that there is a $60 dollar premium on the current price of a barrel because of speculation. Even oil producers are saying that. So that does not make sense to me. If it curently costs say $50 to make a barrel, and a producer can sell it for $60 and make money, then if that producer's competitor says to a customer "I'm charging $120 based on futures speculation," that first producer would jump in and say, "Holy crap! A $60 premuim for speculation! Screw that! I'll GLADLY sell you all the oil you can take for $70 and still make DOUBLE what I usually make!" The current spot market should correct and track a lot more closely to supply and demand than to allow such a huge markup based on futures speculation. It would seem like the only way you're going to make money in futures is to know what the price really is going to be. I mean it does you no good at all to agree to buy a barrel at $130 next year if the price is really going to be $60. Unless this really is a true bubble and people are just passing the overpriced contracts on to bigger and bigger suckers, until the bubble pops, and someone is left holding a poisonous 130-dollar contract to buy 60-dollar oil.

yeah yeah yeah just you wait!!! how great the bush managed to make it drop lol! it it will rise again!

Instead of dropping the price of oil only, maybe they should drop the amount of ethanol in gasoline so that my car and the others affected by it will stop running poorly...

but per every 20,000 gallons of gas, it must be nice to have an extra 2,000 to sell again...this ethanol crap is b/s that's what I'm worried about...it's getting harder and harder to find a station with pure gas

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Originally Posted by dragonrider

Some people are claiming that there is a $60 dollar premium on the current price of a barrel because of speculation. Even oil producers are saying that. So that does not make sense to me. If it curently costs say $50 to make a barrel, and a producer can sell it for $60 and make money, then if that producer's competitor says to a customer "I'm charging $120 based on futures speculation," that first producer would jump in and say, "Holy crap! A $60 premuim for speculation! Screw that! I'll GLADLY sell you all the oil you can take for $70 and still make DOUBLE what I usually make!" The current spot market should correct and track a lot more closely to supply and demand than to allow such a huge markup based on futures speculation. It would seem like the only way you're going to make money in futures is to know what the price really is going to be. I mean it does you no good at all to agree to buy a barrel at $130 next year if the price is really going to be $60. Unless this really is a true bubble and people are just passing the overpriced contracts on to bigger and bigger suckers, until the bubble pops, and someone is left holding a poisonous 130-dollar contract to buy 60-dollar oil.

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Oil futures used to be a risky market for this reason. However the trend by speculators it's being less treated as a commodity and more like an asset class. If someone ever bought oil at $60, it would only be involving the first trade. Oil futures and sold multiple times before it's even used.

As the physical price goes up, let's say Seller A is holding a bunch of contracts for the value of $60 an oil. Now the actual oil price keeps climbing. Those contracts become more valuable as oil is in demand. Let's say Buyer A see $70 a barrel an oil as a bargain. Seller A sells it to buyer A for $70 making $10 a barrel himself. The price keep climbing because there's no news of increase supply, OPEC implemented a price increase, it becomes more attractive to investors. Then Buyer A will sell to buyer B for a little more each time, being traded over and over again. That's how the price is drived up.

Now how does drilling off-shore lower oil futures and the physical price of a barrel of oil? It's the creation of new contracts. You are injecting supply into a market with very limited supply. No one can get oil futures unless the seller is willing to sell them.