So, President Bush announces he’s rescinding the Executive Order banning offshore oil drilling. The next day the price of oil starts dropping. It’s now down ~$20, and has passed below $130 / barrel (which was labeled a “critical psychological barrier” in an article I read when the price was between $130 and $135). Senate Republicans have decided to pretend for a while that they actually are Republicans, and have started stopping Senate business until Harry Reid lets the Republicans bring a bill reversing the Congressional ban on more offshore oil drilling.
Futures markets, like all other human markets, operate on psychology as much as data. If the Republicans can defeat Democrat obstruction on drilling, and on turning oil shale and tar sands into gas, it will ahve an immediate effect on prices.
And if the Republicans can’t defeat the Democrat’s desire to force higher fuel prices on all of us, but can convince the public that Republicans, unlike Democrats, want lower gas prices, The Democrats will end up paying a big price for that in November. (Given that it’s true, I think that even the Republicans can probably get that message out.)
Win – win. “All” the Republicans have to do is show some balls.
Tags: Fuel Prices