Oil Economics 101

Remember when the Repugs and their acolytes were touting George W. Milhous Bush as “America’s First MBA President” (here)? Remember when we were led to believe that this meant that he supposedly would manage our economy more efficiently than those “career politician” government types who merely gave us budget surpluses and a dollar that, if not strong, didn’t fall through the floor as ours does now, currently trading at $1.53 against the Euro?

Remember the day we woke up?

All of this came (excuse me) gushing back to mind as I read this story in the New York Times today about our “good friends” the Saudis who currently have just about everything they could want; most notably, oil at $104 a barrel (it was at a previous record of about $60 a barrel in 2005, and it’s been setting records ever since as we know) and no motivation whatsoever to increase supply and this lower our price at the pump, which also cuts into their profits of course.

And on top of that, they can lecture us about how the mess we’re currently dealing with is our own fault. And the worst part about it is that they’re right.

“OPEC is angry that President Bush wants them to increase production while the dollar is sinking and the administration is doing nothing about that,” said Fadel Gheit, an oil analyst at Oppenheimer & Company in New York. “It’s really not surprising that they have ignored him.”

And by the way, this goes to the title of this post…

“OPEC’s biggest fear is that this is a bubble and that prices will drop by $30 a barrel,” said Roger Diwan, a managing director at PFC Energy, who was in Vienna to attend the meeting. “So they keep tightening supplies and prices keep going up.”

Yep, ya’ gotta watch out for those “bubbles” as we’ve done so successfully ourselves (snark – see dot.com, housing…).

So what does our preznit do when he’s ignored? What he always does, of course, in the manner typical of a spoiled child; he throws a tantrum…

“I think it’s a mistake to have your biggest customer’s economy to slow down” because of high energy prices, he said.

Demonstrating his superb elocution skills again - and if you want to read something really funny…

“America’s got to change its habits; we’ve got to get off oil,” Mr. Bush said at a conference on renewable fuels in Washington. “Until we change our habits, there’s going to be more dependency on oil.”

However, as Will Bunch notes from here…

"The Bush/Cheney administration has paid lip service to renewable energy and backed it up with inadequate and incremental funding support, favored old dirty and unsafe technologies, threatened vetoes of energy bills because they supported renewable energy incentives and mandates, and undermined the science of and the search for solutions to global warming," said a statement from Senate Democrats.

And we can always count on the investor class to withstand any turbulence particularly when it comes to energy, can’t we (as the Times tells us)…

“The market continues to be well supplied,” Rex W. Tillerson, the chairman and chief executive of Exxon Mobil, said at a conference in New York. “There has been no interruption of supplies.”

And speaking of ExxonMobil, I meant to note earlier this simpatico gesture from Hangin’ Judge J.R. (yep, sounds like another “activist judge” showing his true colors again).

Maybe Lee Raymond’s old company got that hug they were looking for after all. I’d ask if they would impart the same to me to help take the sting out of our woeful economic state due to President 19 Percent Mandate’s gross incompetence, but being the corporate criminals that they are, they’d probably lift my wallet out of my pocket while doing so.