BZ:Oil and Vinegar Don't Mix and Neither Should Oil And Politics
Last week the International Energy Agency(IEA) planned to release 6o million barrels of oil from emergency reserves including 30 million barrels from the US Strategic Petroleum Reserve. The official party line is that the conflict in Libya has removed around 140 million barrels of oil from the market and this could result in tightness of supply and poses a threat to the recovery. The market reaction was to send crude prices plummeting mainly because the announcement was unexpected. Of course we live in a shoot first ask questions later market so the plunge was to be expected.
Looking at the situation realistically I have to question if there were ulterior motives or agendas in action here. In the year 2010, the IEA reported that the world consumed 88 million barrels of oil a day. The much talked about release of 60 million barrels equates to about 2/3 of a day’s supply for the world, or hardy enough to cause the dramatic price drop we experienced. As soon as I heard this news my first thought was this was a politically motivated move and I still believe that it is. My suspicions were heightened to this as Timmy "Turbo Tax" Geithner began making the rounds stating that the release was not political almost like a Jedi mind trick. I can almost picture Timmy on TV saying “These are not the barrels you are looking for..”
