Wednesday, April 26, 2006

Gas price gouging and whine about profits.

Bidness: A whole bunch of hooey that gets the ignorant and the fearful jumping around like meth-addicted monkeys. Most of the moves made by President Bush will please the simpletons, but the only thing worth looking at is the oil future prices.

Bush and Republicans in Congress face growing pressure from voters as crude oil soars to a record and gasoline pump prices near the all-time high set after Hurricane Katrina last year. A CNN poll released yesterday showed 69 percent of U.S. adults say higher fuel costs are causing financial hardship. The Energy Department will suspend deposits to the Strategic Petroleum Reserve through the end of summer, which is the period of peak demand in the U.S., Bush said. Because the stockpile is nearly full, the effect of the halt may be minimal. The government has been adding an average of about 25,000 barrels of oil per day to the reserve so far this year. The U.S. imports about 10 million barrels a day. Oil Reserves The U.S. reserve, in underground salt caverns along the U.S. Gulf Coast, is meant to be used in case of a sudden supply disruption. Bush has said he would not release reserves just because prices are high, and he didn't change that stance today. Crude oil surged to a record $75.35 a barrel on the New York Mercantile Exchange last week amid concern that Iranian oil supplies might be jeopardized by the dispute over Iran's nuclear program. Oil fell 45 cents to $72.88 a barrel today in reaction to Bush's speech. Fear of future disruptions is doing more to boost oil prices than a lack of supply, Saudi Arabia's oil minister, Ali al-Naimi, said this week. Saudi Arabia is the biggest oil producer in OPEC, followed by Iran.
The chickens playing the market are the ones pushing the prices up more than anything. You can also blame the ridiculous amounts of different fuels companies have to make to meet standards by different states and various amount of local and state taxes that help drive the price of gas up. What is everone focused on? Fantasy price gouging and those evil oil companies making profit.
The plan to waive rules governing fuel blends could do more harm than good, according to Bob Slaughter, head of the National Petrochemical and Refiners Association, the refining industry's trade group, based in Washington. ``If you even consider making any change, you want a lot of evidence that a change is necessary and will do more good than harm,'' Slaughter said in an interview yesterday. ``That is not the case right now.'' Refiners are replacing MTBE, a gasoline additive that fouled drinking water supplies, with ethanol because of changes in fuel rules in the energy legislation Bush signed in August. Over the past week, shortages have occurred in Delaware, Pennsylvania, Virginia and Maryland, according to the AAA, the nation's largest motoring club. About 60 filling stations in the Dallas area experienced brief shortages earlier this month. The transition has been made more difficult because it coincides with an annual switch to so-called summer-grade fuel, required in some places under the Clean Air Act. Pennsylvania is the only state so far to request a waiver of the summer rules, according to Jennifer Wood, spokeswoman for the Environmental Protection Agency in Washington. Price Manipulation The investigation by the Federal Trade Commission and the Justice Department was sought by the Republican leaders of the House and Senate. It renews Bush's directive to the FTC after Katrina hit to be on the watch for price gouging. ``The first thing to do is to make sure Americans are treated fairly at the gas pump,'' Bush said. ``This administration is not going to tolerate manipulation.'' Boone Pickens, a Dallas hedge fund manager and Bush supporter, said he was disappointed the president is raising this issue because it probably won't lead to anything. ``There's not anything there. There's not anybody gouging,'' Pickens said in an interview today at the Milken Institute conference in Los Angeles. ``You have the Federal Trade Commission looking at gasoline prices every day.'' U.S. Attorney General Alberto Gonzales and FTC chief Deborah Platt Majoras today sent letters to state attorneys general pledging cooperation on investigations and saying the agencies ``have substantially increased our efforts at the federal level to monitor, detect, pursue and prevent any violations of the law in this industry.'' The FTC will send a final report to Congress by May 19 on whether businesses have manipulated gasoline markets and prices. Past Investigations Past investigations of price gouging have concluded that ``the industry is reasonably competitive and the explanation for price increases lies in other causes,'' said Bert Foer, president of the American Antitrust Institute. The chance investigators will find anything new ``strikes me as fairly low,'' he said.
Read the whole bloomberg article as it shoots down a lot of the stupid rhetoric.

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