Prime Minister Cameron has announced a sweetheart deal to help Obama get re-elected. He will authorize the sale of part of the British government’s strategic oil reserves. Obama will do the same for American reserves. Together, they think oil prices will fall. Then gasoline prices will fall.
The reuters headline was on target.
Britain has decided to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.
“Britain” has not decided this. Cameron has.
A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected “shortly” following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said.
Britain would respond positively, the two sources said.
There are no details on the timing of the joint release.
The emergency oil reserves were paid for by taxpayers. It is clear what the emergency is: Obama’s falling poll numbers.
I assume this rumor is true. That is because it has been denied. “The issue of oil supply was discussed but no decisions have been taken,” a spokesman travelling with Cameron said.
“The Obama administration can only take so much political pain from rising gasoline prices, which pose a serious threat to the economy and the president’s re-election,” said Bob McNally, a former White House energy adviser and head of U.S. energy consultancy Rapidan.
“SPR (Strategic Petroleum Reserve) use is more a matter of when than if. The administration strongly desires international support and coordination from other strategic stock holders, but is encountering stiff resistance from some IEA members who think strategic stocks should only be used for severe supply disruptions,” McNally said.
Obama is falling in popularity. The pundits say it’s the rising cost of gasoline.
On this issue, Obama is not to blame. International oil prices are set by supply and demand. The world uses about a billion barrels of oil every two weeks. Nothing Obama has done has affected this market.
Yes, he vetoed the oil pipeline, but that would have taken years to construct.
However, he knows he is hurting politically. So, he and Cameron will decide when to release this oil.
It will come either after Israel bombs Iran or else, failing that, when the polls indicate his defeat in November.
The plan will fail. There are not enough reserves available to hold prices down more than a few weeks. The world uses a billion barrels of oil every 12 days. The total strategic reserve of the USA is about 700 million barrels. The size of the British reserve is unknown.