Oil Traders: Tapping Reserve Was 'Genius' Move by Obama

[tridim]

With US crude prices already down 16 percent from their April high, pundits and politicians everywhere were asking Thursday: "Why would President Obama tap the Strategic Petroleum Reserve when oil prices were already falling?”

The answer is simple: Obama knew this would have the maximum impact, hitting speculators on the chin, according to traders.

“Arguably the timing of the release is genius,” said Stephen Weiss of Short Hills Capital. “If the SPR had been released as crude worked higher, the effect would have been relatively momentary, but releasing it now, with the momentum on crude prices turning down, will add to the price decline as speculators hit their stops and margin limits more quickly forcing them to sell.”

Prices for WTI oil , the benchmark for the U.S., plunged as much as five percent on Thursday after the Department of Energy and the International Energy Agency announced a coordinated release of 60 million barrels from so-called emergency stockpiles.

More: http://www.cnbc.com/id/43514254?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

[Dawson Leery]

1. The gamblers need to be hit as hard as possible.

The next step should be to raise capital gains tax from 15% to 40%.

[WCGreen]

10. Transaction tax of .10 per quantity for all trades....

If asset held for more than 6 months, the tax would be allowed to be included in the assets basis....

[taterguy]

15. It would be 'possible' to drastically curtail consumption which would really screw the gamblers

But who wants to do that?

[ProdigalJunkMail]

2. the lagging economy and sagging employment had MUCH more effect

3 days worth of US consumption was a mere blip...

sP

[tridim]

6. Doesn't matter if it's a blip, it's working already.

Crude oil futures are down 4.5% just today. I'll eat my words if oil is back up to 110.00 next week.

Take a look at the reaction by the paid big-oil trolls on some of the financial boards. They are PISSED, which is very good for us.

Did you notice that the price at the pump started dropping as soon as the administration announced they were going to investigate price manipulation?

[ProdigalJunkMail]

8. if it WERE caused by the release from the SPR then it WOULD

climb back quickly...but the downward pressure is not related to this release. You are dealing with correlation and not causation. The oil price drop is based on global economic woes...not 60M barrels out of our reserve (that by law we have to refill).

sP

[dkf]

13. They are going to fill it with gas and diesel.

If they start filling it this summer wouldn't that push prices up?

[ProdigalJunkMail]

32. my hope is that they will wait till fall when prices normally decline

a bit...

sP

[TheWraith]

3. They've been falling because there's finally some serious investigation of speculators.

The free ride is coming to an end, and they want to get out before they're thrown out. Tapping the SPR is the metaphorical bouncer cracking his knuckles and looking at them crossly.

[Drale]

4. To quote Dr. Sheldon Cooper

"Well Played"

[no_hypocrisy]

5. To quote "Trading Places":

The best way you hurt rich people is by turning them into poor people.

[tridim]

7. Precisely, there are lots of good economic lesson in that movie.

"Sounds to me like you two are a couple of bookies"

[CleanGreenFuture]

9. I'm grinning so hard that I think I may break my face. =D

[Enrique]

11. the GOP is probably mulling impeachment right now

asking each other, "what do we have on him?"

[tridim]

12. They would have already done it if they had anything on him.

IMO, they're pre-counting their inevitable 2012 losses.

They probably already had ads in the can blaming Obama for high gas prices.

[RB TexLa]

14. The reserves should only be used for an emergency. Never for anything related to price.

[tridim]

16. Price manipulation by an industry that provides a basic commodity is an emergency.

Especially when that manipulation is technically legal.

It's an emergency to anyone who can't afford to pay $4.00 for gas, which is just about everyone.

[RB TexLa]

18. It's not an emergency, and no that is not "just about everyone"

[tridim]

19. Not being able to afford food is an emergency.

You must be wealthy, else you'd know that.

Don't worry, the reserve will be refilled, and at a cheaper cost BTW.

[sufrommich]

21. Well, if you can't afford gas to get to your job, it tends to

matter as far as food is concerned too. Not everybody lives in an urban area with transportation.

[tridim]

23. Food is expensive right now because of oil speculators, it's all related.

[petronius]

20. That's kind of what I was thinking - the article sounds like this was intended

just to slap at investors who are betting the 'wrong' way. There may be sleazy practices in the market, but there must be better ways to clean it up than this kind of manipulation... :shrug:

[tridim]

22. Nothing else was working, this worked in 2 hours.

I don't understand why people are freaking out about it. It's a good thing in every way and the reserves will be replenished quickly. It's not like we're going to have a nuclear war tomorrow.

[slipslidingaway]

17. Obama releasing 30M barrels from US oil reserves

http://finance.yahoo.com/news/Obama-ready-to-release-oil-apf-2233806614.html?x=0&.v=1

WASHINGTON (AP) -- Wary of a new surge in gas prices, the Obama administration said Thursday it is selling off 30 million barrels of oil from the country's emergency reserves as part of a broader international response to lost oil supplies caused by turmoil in the Middle East and North Africa, particularly Libya.

The release from the U.S. Strategic Petroleum Reserve will be the largest ever, amounting to half of a 60 million-barrel international infusion of oil planned for the world market over the next month.

Even so, the 30 million barrels to be sold by the United States represents less than two days' worth of domestic oil consumption and about three days of oil imports.

..."We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," Energy Secretary Steven Chu said..."

[MessiahRp]

29. I think we stockpile like 700m barrels a year so this is pretty much nada.

And if this small a contribution can break speculators, I wonder what the release of say 100m barrels would do. $2/gallon gas again?

[Stinky The Clown]

24. Sugar high

Plus we have to buy back 30m bbls to replace this.

[tridim]

26. Right, we buy it back at a cheaper cost than it was purchased for.

Win freaking win.

See the forest stinky, ignore the trees.

[Stinky The Clown]

27. .

[JoePhilly]

34. What you said!!

[ProSense]

25. Sanders Applauds Tapping Oil Reserves

Sanders Applauds Tapping Oil Reserves

[Scurrilous]

28. K & R

:thumbsup:

[BoWanZi]

30. Awesome move!!

[MODem75]

31. Big oil's marionettes are upset over this.

http://blog.chron.com/txpotomac/2011/06/gene-green-says-obamas-strategic-petroleum-reserve-release-sends-a-message-to-opec-texas-republicans-call-it-a-pr-strategy/

[Shagbark Hickory]

33. As long as it's legal to gamble on commodities like oil, my blame will continue to be solely with

the government.

A few months ago when I complained about rising gas prices to my accountant, he said well you should speculate on the oil too.

I should have listened.

But oil is a product that is traded in the open market. And as long as it is I really don't fault the people trying to speculate. I fault the government for letting it happen. Personally, I feel we should nationalize the oil drilling and control a large part of the supply and cost as well as distribute dividends to all citizens for profits made selling the oil to other countries.