Finally, President Obama has done what he should have done long ago, and what he promised he would do during his campaign. He has stood idly by watching the price of oil rocket from $33/bbl in February 2009 to over $100/bbl these past weeks, while his Energy Department continued to fill the Strategic Petroleum Reserve (SPR) thereby taking oil off the market, making it scarcer, upping the price, all to the cheers of the oil industry, oil state politicos, and Wall Street Bank Holding Companies who were busy buying oil and holding it in tankers at sea in the expectation that the administration would continue to sleep at the SPR switch. In not using the SPR the administration sent a further signal that prices, as they continued to escalate, was an acceptable distortion of the market, and indeed prices continued to escalate.
This corner pointed out time and again that the SPR was a powerful tool unused and abused by the administration. That a release from the SPR, no matter its dimension, would send the oil speculators to the hills. And so it came to pass. Today the administration announced the release of 30 million bbls of oil, less than two days of U.S. consumption and the price immediately collapsed by near $5 a barrel. With U.S. consumption running near 20 million bbls/day that's a reduction of $100,000,000/day going from the pockets of American consumers into the sticky hands of oil interests.
Bravo Mr. President!