Driving down the price of oil with the stroke of a pen

Mark Hemingway:

After trading at a record high of $147 a barrel Friday, the price of oil saw its largest one-day drop since the 2003 beginning of the Iraq war on Tuesday, falling $6.44 a barrel. Wednesday, it fell another $3.71, to $135.03, and at one point was trading as low as $132.

So what happened? As is usually the case with markets, a variety of factors caused this dramatic drop. According to the Associated Press, the Energy Information Administration announced that U.S. crude-oil supplies rose by 3 million barrels; beleaguered banks have been selling off valuable energy contracts to pay for other debts; and there’s even some speculation that computer programs used by Wall Street may create a “cascading effect” once prices start to drop.

But bizarrely, the AP didn’t mention that on Monday — again, the day of the single biggest one-day drop in oil prices in five years — President Bush removed the executive order imposing a moratorium on offshore drilling in the United States.

To think that this dramatic and unexpected move by the Bush administration didn’t have a significant effect on oil prices is folly. Even Democrats admit that relatively small margins in oil production could have a huge impact on prices.

“If they [Saudi Arabia] produced half a million barrels more oil a day the price would come down a very significant amount and, at the same time, it would stop the speculation that keeps driving up the price of oil,” Sen. Charles Schumer (D., N.Y.) said on the Senate floor Wednesday.

But if half a million barrels a day is all that’s needed to get the price of oil down, why, pray tell, are we at the mercy of the Saudis?

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Each day the Democrat "energy" policy looks more irrational. They tells that we will get no immediate benefit from drilling. Never mind that that is what they said 10 years ago. No rational person can say that we would not be getting a benefit from drilling in ANWR in 1996 unless his name is Chuck Schumer who has the bazaar notion that Saudi oil will drive down the cost of oil by US oil will not. Nancy Pelosi just grows more shrill each time the subject comes up but has nothing to offer but a witch hunt for speculators.

I hope they keep this up through November and that the public notices.