Offshore Drilling Ban to be Lifted by Bush

[scaeagles]

Originally Posted by wendybeth

Besides, I was under the impression that it's not a shortage that is causing this problem- it's unbridled speculation, due to the lifting of controls that had been set in place post-Great Depression.

You are indeed correct. But the specualtion is taking place because of the unease in the Middle East and Hugo Chavez. A supply of oil coming to America that is not from the Persian Gulf immediately reduces speculation.

It is also a function of the weakened dollar.

[sleepyjeff]

Originally Posted by scaeagles

. A supply of oil coming to America that is not from the Persian Gulf immediately reduces speculation.

Exactly! If you're an OPEC leader and you just found out that America is going to start drilling off their own shores you're not going to say "well, that's going to take 10 years so I'll just keep the prices high until then"....you're going to want to sell as much oil as you can right now, while the prices are still high, rather than just sit on it waiting for competition to lower the demand.

Just announcing that we are going to drill off our shores will lower the prices now, because of speculation