All,
Looks like I'm not the only one who believes that just mentioning and supporting the idea of offshore drilling would change the sentiment of futures traders in Oil. This is a quote from an article (link below) on Bloomberg.com:
``The prospect of considerable supply even though it may take some time to bring on line changes decisions of energy buyers, hedgers and investors,'' said William Whitsitt, president of the American Exploration and Production Council, which represents oil and gas companies. ``There is no doubt in my mind that this can have a positive effect for consumers.''
But listen to what the Dems are saying. No wonder they are usually not the best entrepreneurs or business leaders:
Democrats have blocked congressional efforts to lift the ban, arguing that Republican estimates that there are some 86 billion barrels available are overstated and doing so would have no short-term effect.
Did they miss the class "Supply and Demand in Futures 101"? The price of oil is traded in futures which are based on the future supply to the oil reserves. If the future has the potential to have more oil on the market -whether or not it is next month or 3 years from now - the futures markets will take note and trade accordingly.
This is a bold and stalwart political move for Bush, as now it is up to Congress (and the Dems more especially) to show their true colors of who they represent. The People have been asking for drilling relief for some time now. It will be interesting to see what happens.
As a side note, oil futures are down today. I wonder why?...
Here is the full article: http://bloomberg.com/apps/news?pid=20601087&sid=agDd8wY3LT9w&refer=home
--
Tijs Limburg
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