Yesterday I wrote about the latest meme to come out of the White House: that the president cannot control oil prices. This is of course ridiculous. Should the president choose a path that would increase supply — even if not immediately — the price of oil would go down.
Everyone knows that while the oil market (like all markets) can be manipulated, in the end when supply outpaces demand prices go down; and when supplies are tight relative to demand prices go up.
IMF chief Christine Lagarde warned Tuesday that crude oil prices may spike by up to 30 percent if Iranian supplies were disrupted, causing “serious consequences” for the global economy.
The standoff between Iran, the world’s second-largest supplier of oil, and the West over the Islamic Republic’s nuclear program is seen as a flashpoint that could sharply increase world crude prices.
“Clearly it would be a shock to economies if there was a major shortage of exports of oil out of Iran, it would certainly drive up prices for a period of time,” Lagarde told reporters in New Delhi, wrapping up a two-day visit.
The International Monetary Fund (IMF) has calculated that an interruption in oil supplies from Iran could increase oil prices by 20 to 30 percent, said Lagarde, who arrived in India at the weekend from neighbouring China.
via FRANCE 24.
2 thoughts on “IMF Chief: Oil Supply Matters”
So you realize that oil prices are set on the international market? That production in the US is at it’s highest level since clinton? That drilling on public lands has increased 13% under Obama? That US oil companies are currently setting records for exports? And that US refineries are operating at capacity- they can not make up for a major reduction in another countries exports? That a future supply has little impact when the current supply/demand is interrupted?
more relevant info here: http://drugsandotherthings.wordpress.com/2012/03/13/republican-lies-re-gas-prices-and-production-they-think-youre-stupid/
Drugs, I linked to your post in mine (you’re welcome,) so you didn’t need to link it up again. Don’t be a pig.
As for all your questions… so what?! US production of oil means little in a global market. US consumption of oil (which is down) means little in a global market. Global demand for oil is up. India, China, South America are all using far (FAR) more oil than they were 5, 10 years ago. See here: http://omrpublic.iea.org/
Global supply a/k/a production is a little over 89 million barrels a day.
It’s worth noting that OPEC is about 30 md/day which is about 1/3 of all production.
Global demand a/k/a use is a little over 91 million barrels a day.
So every day that passes is a day that oil reserves are tapped to the tune of about 2 million barrels… regardless of US production or consumption. You want to fix that problem using only the U.S. then we need to reduce our consumption or increase production by 2 mb/day.
As for your claim that “US refineries are operating at capacity” that is simply false. See this post here: http://jamesbosco.com/2012/03/19/a-presidents-control-of-oil-prices/ Well respected news organizations acknowledge that US refineries are shutting down because US demand is so low.
You can’t believe everything David Axelrod tells you. That man’s a lying lier.
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