Prediction:
President Bush will (a) stay the course and lose the election or (b) flip-flop in an attempt at re-election:
Last week the Senate, after hearing arguments that the reserve was diverting oil from the market and helping to drive up prices, voted to sell millions of barrels earmarked for the reserve [ie, the Stategic Oil Reserve] and use the money for homeland security.
On Monday, Senator Barbara Boxer and Congressman Mike Thompson, both Democrats from California, wrote to US Energy Secretary Spencer Abraham, asking the government to stop filling the reserve.
In addition, the airline industry, faced with rising fuel prices, has been lobbying for an end to the reserve build-up.
But a spokesman for Mr Abraham, Ms Jeanne Lopatto, said the administration would stay on the course set by President George W. Bush soon after the Sept 11, 2001 attacks to fill the reserve to its current capacity, 700 million barrels, 'in a deliberate and cost-effective manner'.
The concern over the diversion of oil into the reserve comes during an election year, when many lawmakers seem eager to find a way to lower petrol prices, to keep them from becoming a campaign issue.
(Story from the Straits Times, emphasis added.) It seems that when crude prices are at the highest level since the 1990-91 Gulf War, now probably isn't the best time to top off the Strategic Oil Reserve. A related story
(Oil price up, inventories in US down - Bloomberg Business News via Sydney Morning Herald) notes that
Gasoline inventories were expected to fall by 1 million barrels, based on the median estimate in a Bloomberg survey of 14 analysts. Demand rose to 9 million barrels a day, the highest since mid-December, the US Energy Department said in a report. Gasoline imports fell 8.5 per cent to 934,000 barrels a day.
US refiners had unexpectedly cut processing to 87.6 per cent of capacity, from 89.1 per cent the previous week.
Analysts had projected an increase in refinery utilisation to 89.6 per cent in order to start building petrol stocks for the US summer.
Why would they "unexpectedly cut processing?" The oil companies are playing tricks on us again.
