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Increasing the Supply of Oil Won't Decrease Gas Prices in America

PolicyMic -- To see how well this strategy works, recall the last time the strategic reserves were tapped — all the way back on June 23, 2011. Obama announced the release of 30 million barrels of oil from the nation’s reserves, in conjunction with another 30 million tapped by the International Energy Agency. This move was widely panned among financial experts as unnecessary, with one oil analyst noting, “There’s been weakness of demand and I don’t see what the release of 60 million barrels of oil adds to the market.”

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Submitted Feb 26, 2012 By: johnnyg1200

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db60 All-Star Author Indiana Posts:982 Points:211,255 Joined:Oct 2011	Message Posted: Feb 27, 2012 11:20:30 AM Ignore db60 Report Abuse Good post.
jwalkerh Champion Author Louisiana Posts:6,127 Points:1,368,270 Joined:Oct 2008	Message Posted: Feb 27, 2012 6:13:24 AM Ignore jwalkerh Report Abuse Nothing can decrease the prices at the pumps...
kenji554 Champion Author Charlotte Posts:1,216 Points:510,125 Joined:Jun 2011	Message Posted: Feb 27, 2012 5:54:33 AM Ignore kenji554 Report Abuse Keep the reserves for a national emergency. Releasing them will not effect prices.
Jeff4U Champion Author Atlanta Posts:8,728 Points:1,848,370 Joined:Nov 2004	Message Posted: Feb 27, 2012 12:49:32 AM Ignore Jeff4U Report Abuse Increasing the reserves would though. Supply is meaningless because it can be diminished whereas output capability and reserves insures our future supplies. In other words, let us develop our own resources so we don't need foreign oil.
Jumpmaster82 All-Star Author South Carolina Posts:919 Points:846,810 Joined:Nov 2008	Message Posted: Feb 27, 2012 12:27:29 AM Ignore Jumpmaster82 Report Abuse Baloney
nurdco Champion Author Colorado Springs Posts:9,205 Points:1,690,410 Joined:Apr 2008	Message Posted: Feb 27, 2012 12:23:42 AM Ignore nurdco Report Abuse False hope...
northeast2 Champion Author New York Posts:3,849 Points:1,007,200 Joined:Mar 2008	Message Posted: Feb 26, 2012 11:08:41 PM Ignore northeast2 Report Abuse Please don't confuse Sarah with the facts.
Charley_7 Veteran Author New York Posts:293 Points:206,455 Joined:May 2011	Message Posted: Feb 26, 2012 10:43:56 PM Ignore Charley_7 Report Abuse How gas prices in America can decrease: when, by some magical reason, all the refineries on the coasts are no longer operational, or there is no way to get the refined oil to the coast - pretty much the same reason that the prices in the Midwest are lower than the rest of the country...
PDQBlues Champion Author San Diego Posts:7,054 Points:1,444,325 Joined:Jan 2009	Message Posted: Feb 26, 2012 9:14:03 PM Ignore PDQBlues Report Abuse This country has such an over supply of oil that we have become a major exporter. So we already know additional supplies will do nothing to lower prices.
clpassenubye Champion Author Los Angeles Posts:3,359 Points:749,880 Joined:Mar 2011	Message Posted: Feb 26, 2012 9:12:49 PM Ignore clpassenubye Report Abuse Wow
clpassenubye Champion Author Los Angeles Posts:3,359 Points:749,880 Joined:Mar 2011	Message Posted: Feb 26, 2012 9:12:40 PM Ignore clpassenubye Report Abuse Wow
tnfran Champion Author Arizona Posts:4,362 Points:839,145 Joined:Dec 2010	Message Posted: Feb 26, 2012 7:41:02 PM Ignore tnfran Report Abuse Just another "screwup by the so called President" of America. He is an extremely POOR excuse for a leader. Leaders "lead by example, (not bully people into submitting to their ideas)." BO bullies, intimidates, Stifles, cajoles , pushes, lambasts, until he gets the votes "he wants".
BobBG All-Star Author Albany Posts:820 Points:806,960 Joined:Nov 2005	Message Posted: Feb 26, 2012 7:17:32 PM Ignore BobBG Report Abuse There ar eno simple answers to lowering gas prices.
sonnyh1862 Rookie Author San Diego Posts:1 Points:3,145 Joined:Mar 2011	Message Posted: Feb 26, 2012 6:45:08 PM Ignore sonnyh1862 Report Abuse Obama says what people want to hear an does nothing. He talks to be important in his own mind. What a joke.
molebaby96 Champion Author Tallahassee Posts:2,118 Points:501,805 Joined:Nov 2011	Message Posted: Feb 26, 2012 2:56:19 PM Ignore molebaby96 Report Abuse We will export the finish product.
gasokie Champion Author Oklahoma Posts:3,442 Points:1,323,805 Joined:May 2007	Message Posted: Feb 26, 2012 2:33:17 PM Ignore gasokie Report Abuse US refineries are exporting gasoline because buyers (speculators?) are coming in and bidding it up because there is demand in overseas markets. It's a free market and I wonder what people are thinking when they say things like "they" need make them stop exporting stuff. Who is they? Or do you want a North Korean type society? It would take a world wide dictorship to do all that and I'll bet everything would be a lot worse for it.
glorioussnookie Champion Author Tennessee Posts:3,761 Points:699,370 Joined:Feb 2010	Message Posted: Feb 26, 2012 1:44:31 PM Ignore glorioussnookie Report Abuse Night Owl I am in total agreement, we need to go after the cause - The Greedy Speculators and also the Greedy Oil Companies! If the stopped exporting so much of our oil but tat won't happen because of their out and out Greed!
TruthMatters Champion Author New Jersey Posts:2,510 Points:530,435 Joined:Oct 2011	Message Posted: Feb 26, 2012 1:30:51 PM Ignore TruthMatters Report Abuse Worth a try again because the prices are really getting ridiculous! I admit that it won't solve anything though because we are so addicted to gas! People just needs to drive less and downsize their vehicles!
chemist74 Champion Author Cleveland Posts:13,510 Points:2,395,980 Joined:Apr 2005	Message Posted: Feb 26, 2012 1:12:48 PM Ignore chemist74 Report Abuse U.S. refieries are already exporting gasoline because domestic demand is down. Releasing crude from the reserves will just mean the refineries will export even more gasoline.
dh0770 Champion Author Colorado Posts:6,978 Points:671,485 Joined:Jun 2011	Message Posted: Feb 26, 2012 1:06:21 PM Ignore dh0770 Report Abuse Increasing supply won't impact the price, only when speculation is reigned in will that happen!
dr047 Champion Author Cleveland Posts:2,570 Points:513,445 Joined:Aug 2010	Message Posted: Feb 26, 2012 12:31:23 PM Ignore dr047 Report Abuse And drilling here won't lower gas prices either. Gas and oil is a world commodity and we just EXPORT it!
dsaine Champion Author North Carolina Posts:2,977 Points:628,495 Joined:May 2011	Message Posted: Feb 26, 2012 12:31:20 PM Ignore dsaine Report Abuse We should release some reserve's to release some pressure at the pumps, along with the need to drill also. The American people have suffered long enough!
TXRanger09 Champion Author Dallas Posts:2,494 Points:888,210 Joined:May 2009	Message Posted: Feb 26, 2012 12:22:15 PM Ignore TXRanger09 Report Abuse Why increase US supply when demand is down? And as our writers have stated several times, the last time we released SRP it had little effect.
uglytom Champion Author Florida Posts:7,464 Points:1,542,015 Joined:Jul 2007	Message Posted: Feb 26, 2012 12:17:45 PM Ignore uglytom Report Abuse History would repeat itself!
Night Owl Champion Author Toronto Posts:7,530 Points:1,782,600 Joined:Jul 2004	Message Posted: Feb 26, 2012 12:08:39 PM Ignore Night Owl Report Abuse It didn't work the last time and it wouldn't work again. Greedy Wall Street oil speculators are firmly in control of oil prices. If you don't go after the cause there's no point in doing anything.
orphancarguyPE Champion Author PEI Posts:3,821 Points:730,015 Joined:Jan 2011	Message Posted: Feb 26, 2012 11:57:42 AM Ignore orphancarguyPE Report Abuse Bad idea to tap the SR. If the US had enough production and small enough usage, that opening the reserve up could change the US from importing about 40% of its crude, down to zero imports, for as long as was required for the worldwide price of oil to fall, then yes, it would be a smart thing. Those circumstances haven't existed for 50 years or more. So, bad idea. The price of ""gasoline"" (note, gasoline, and no other fuel such as diesel, kerosene, jet fuel etc) is high in spite of several factors. One, ""gasoline"" usage in particular fell off the cliff over the last few years during the recession, and it hasn't recovered very much compared to other fuels. At its worst, ""gasoline"" was down almost 10%. I'm thinking, because the average mpg of all vehicles technically on the road in the US has hardly budged up in the last 3 years--not enough to explain the difference in the least--that there are a LOT of second or third cars or trucks that are guzzlers are staying firmly parked most of the time, and the more efficient cars are being used more. One would think that that would lead to a price reduction, but you would be wrong. Gasoline still has to be made, and if it can't be sold domestically, it has to be exported, because there aren't enough storage facilities for this ocean of gasoline, and it has a lifespan anyway. Out of every barrel of crude, there is a percentage of each type of fuel from aviation gasoline and butane, to heavy heating oil, and you can't suddenly stop producing gasoline in favour of jet fuel and diesel fuel by snapping your fingers. Because of pollution and smog, there are a lot of additives in modern gasoline. Costs money. Lots of infrastructure to pay for, from delivery trucks, refineries, and fuel stations. Costs money. Price of crude oil is up. Whether you sell 900 million gallons or 1 Billion gallons, your fixed costs are the same--actually, they are higher on a per gallon amount. Now the hard to understand (for many Americans) bits. Americans are looking at the wrong crude oil price. Instead of WTI (West Texas Intermediate) at say $107 a barrel, look instead to Brent (North Sea) at say $123 a barrel. Brent is a better indicator of world-wide prices than WTI, and its a global market now, and the US pays world prices, since it imports heavily and hasn't produced enough oil for itself for many decades. Yes, there have been some slight improvements in the US in production in crude oil, but not nearly enough to counter all the imports required. To replace all the imported crude oil for making liquid fuels, about 8 to 12 Bakkens would have to be in existence and in full production PDQ. People are confounding the overall US energy picture which is much better, but that is coal, electricity and especially natural gas. Natural gas is not gasoline, and doesn't replace gasoline, diesel, jet fuel etc. Why one thing 'is not like the other' and why you shouldn't hold out (false) hope that shale oil will magically change everything, are neatly explained here: http://physics.ucsd.edu/do-the-math/2011/11/peak-oil-perspective/ http://physics.ucsd.edu/do-the-math/2012/02/the-alternative-energy-matrix/ The refinery business part of the oil price chain has been barely scrapping along at little better than breakeven in the US for some time--so it gets little investment money to upgrade and become more efficient. Their costs have been rising, and its 'recover enough money to pay current costs on outdated facilities, or shut down'. If the price of gasoline in say Barbados or Spain is $0.80 US per litre before taxes, why should refiners in the US sell it to Americans for any less than $3.02.8 a US gallon before taxes? Don't go and say exports of gasoline should be stopped...because a huge chunk of the crude oil used to make liquid fuels is imported, and if 40 countries decided they would gladly pay $0.85 cents a litre before taxes, the crude would all go there until Americans came to their senses and decided to pay $3.21.7 per US gallon before taxes as well. The artificial subsidy on ethanol is ending--every US taxpayer paid for it, whether or not they used gasoline--so the price of gasoline with ethanol in it is going up. Stop robbing one pocket to pay another pocket. Its fairer, especially for those people who don't drive a ""gasoline"" powered vehicle. Uncertainty in the Mid-East also drives up prices. So in a nutshell, a perfect storm for ""gasoline"".
07skydriver Champion Author Ohio Posts:3,243 Points:979,165 Joined:Feb 2009	Message Posted: Feb 26, 2012 11:43:43 AM Ignore 07skydriver Report Abuse The need for petro products is unendlingly increasing. It is and will be available to the highest bidder. If you are having trouble now, better start thinking about making some personal changes. I feel sorry for the generations to come if new forms of energy aren't developed.
WalkingWV Champion Author West Virginia Posts:3,681 Points:776,795 Joined:May 2008	Message Posted: Feb 26, 2012 11:39:16 AM Ignore WalkingWV Report Abuse Someone finally said it! Drill, baby, drill. Big oil wants the cash.
scu227 Champion Author New Haven Posts:4,130 Points:767,880 Joined:Feb 2011	Message Posted: Feb 26, 2012 11:26:42 AM Ignore scu227 Report Abuse I believe they sell it off to the highest bidder, so the winner is the government making a profit. They will also turn around and spend it foolishly so we don't seen win at all.
Buckeyee Champion Author Maine Posts:4,581 Points:895,005 Joined:May 2010	Message Posted: Feb 26, 2012 11:16:23 AM Ignore Buckeyee Report Abuse Last time Obama ordered the release of oil from the SPR, the europeans refused to release their oil. Obama was left looking like a gullable newbie and it cost the US tax payer to replace the oil with more expensive oil. Instead of ordering the east & west coast off limits to drilling, he should have left the coasts open.
sdslim Champion Author Florida Posts:1,875 Points:1,706,510 Joined:Feb 2007	Message Posted: Feb 26, 2012 11:08:59 AM Ignore sdslim Report Abuse I agree with the article.
brbaritone Champion Author Virginia Posts:2,058 Points:1,693,510 Joined:Jan 2007	Message Posted: Feb 26, 2012 11:06:15 AM Ignore brbaritone Report Abuse The SPR should be reserved for emergencies. Lowering the price of oil and gasoline (or merely slowing the rate of increase) is not a 'strategic' need.
playtimeCLE Champion Author Cleveland Posts:8,540 Points:1,540,375 Joined:Nov 2008	Message Posted: Feb 26, 2012 10:52:43 AM Ignore playtimeCLE Report Abuse If we had enough oil to totally flood the market, it would change the price of oil. But I don't think we have enough to to drop the price a lot. Maybe 20-30 cents, I'm guessing.
GManCo Champion Author Colorado Springs Posts:4,981 Points:947,815 Joined:Sep 2010	Message Posted: Feb 26, 2012 10:43:33 AM Ignore GManCo Report Abuse Gas prices are dependent of refineries and the shipment of product overseas.
dgerst Champion Author South Carolina Posts:2,691 Points:551,800 Joined:Aug 2008	Message Posted: Feb 26, 2012 10:39:36 AM Ignore dgerst Report Abuse OK so we'll increased the supply of US oil this year and what has it done for us? Nothing
fowlcan Champion Author Oklahoma City Posts:2,090 Points:680,365 Joined:Feb 2011	Message Posted: Feb 26, 2012 10:37:23 AM Ignore fowlcan Report Abuse I am ready for something to change the price and I mean lower it.
bar1035 Champion Author Charlotte Posts:9,130 Points:1,294,220 Joined:Aug 2006	Message Posted: Feb 26, 2012 10:33:16 AM Ignore bar1035 Report Abuse That is one opinion
Luckylindy Champion Author Milwaukee Posts:4,494 Points:1,123,070 Joined:May 2008	Message Posted: Feb 26, 2012 10:30:31 AM Ignore Luckylindy Report Abuse Odummer doesn't have a clue how markets work.
58salty Champion Author Jacksonville Posts:6,588 Points:625,890 Joined:Aug 2011	Message Posted: Feb 26, 2012 10:28:52 AM Ignore 58salty Report Abuse What will? If there is an answer put it in place. Big Oil Companies think consumption dropped off last year, they aint seen nothin yet. When it goes over $4 up to $5 we will not be going anywhere we don't have to. Unless you work for the government, average salary $125,000. It has grown by 15% in the last 8 years. Obamas HUGE staff is fat happy & overpaid for doing nothing.
jrs4125 Champion Author Indiana Posts:2,738 Points:587,745 Joined:Sep 2011	Message Posted: Feb 26, 2012 10:11:26 AM Ignore jrs4125 Report Abuse This is an unnecessary move. GREED is the reason gasoline prices are so high.