US pressures Saudis to increase oil production http://rt.com/usa/news/us-oil-saudi-iran-479/

Please explain this.

Jerry- I am not really sure what you are asking. The article you posted was from March and there have been a number of developments since that time. I am happy to answer a specific question or clarify something that is unclear

Is the Obama administration purposefully manipulating the price of a barrel of oil before the election? I believer this to be the case. Obama and his admin. have more than once said they want high energy prices in order to force conservation and drive people into solar power and electric cars. The story is old yes, but is that plan reflected in today's price of a barrel of oil? Thx.

Jerry, you are 100% correct, I wouldn't put anything past this sneeky pig thief. When he took office in 09 the gas prices were about $1.89, now look where they are. When the oil got to $150.00 a barrel when Bush was in, we paid about $3.69 a gallon, why are we paying that when the oil is at $90.00 a barrel. When the gas and the oil got that high Pres. Bush checked into it and a short time l;ater the prices came way down, but this muslim pig says he can't do anything about it. He also said one time that he didn't care if gas went to $10.00 a gallon, at a news conference. So I'd like to see Dan explain that one away. Dan would say this moron was doing a great job even if he personally watched him destroy the economy. Dan will vote for him no matter how bad he is, because Dan votes the party, not for if the person can or is capable of doing the job. That doesn't even enter into the question with him or any of the democraps.

You two are like the Abbott and Costello of political debate. One's arguing that Obama is trying to drive oil prices down for reelection, and the other is arguing that he's keeping prices artificially high... and then you're both agreeing with each other as if you're both saying the same thing. Too funny!

I just finished an article about the Chineese lowering the price of oil to boost their economy. A ministry in the government just decides the price and it's done. They can afford to buy huge amounts and distribute it at whatever price they choose. They buy more and more every month making it very hard to compete with them. The Saudis, and others use their resources like bargaining chips and we have to play or pay even more. For now if the President has something they want, that's great (probably Syria) it won't last, so we have to get off the oil merry go round no matter how much it hurts.

It doesn't matter what the President does. They hate him and that's it. Just look at the comments and what they call the properly elected President of the United States.

Would you say calling the president a "sneaky pig thief" was worth "Flag as inappropriate?". I do.

Hookerman, where do you live? The gas prices have been continuing to climb at a cost much more than I paid 4 years ago. If you look back to what happened since 1973, you will see that whenever a Presidential election comes up, OPEC lowers the price of oil for those Presidents who gave a lot of our taxpayer money to their countries, resulting in lower prices at the pump. This way the President can tout that he has lowered the gas prices and helped us increase our spending power, when in reality the prices will go back up the following March. If Obama continues to send our tax dollars to the OPEC nations we can expect a gradual lowering price at the pump before Election Day. But watch out March 2013. If he gets reelected the price will easily go above what we have paid so far. If he is not successful in his reelection bid, the prices will level out until OPEC see's what the new President's policies towards them will be. It's a damn shame when you consider that our country has so many gas and oil reserves underneath us, but the "tree-huggers" have a choke hold on our politicians making it untouchable.

Obama supporters buy gas too. Yes there are some that want high gas prices to help conservation of resources but they are not representative of the Administration. Non of these people now critical of the President opened their mouths when in 2007 Gas hit $4.00. Yes it dropped when the ecconomy was at the cliff but that should not be the measure unless you also want the Market to go back to 7000 and once again start losing 750,000 jobs a month.

Thomas, Your venom is showing and you don't make any sense at all.

Oil prices are subject to the world market; the time when even the US could manipulate prices to a significant degree is long gone. The US has increased production to the point where we are a net oil producer, yet any new production utterly disappears into the giant, gaping maw of the world's oil demand.

Maybe the Keystone XL pipeline will bring some temporary construction jobs, but it is a fallacy that it will reduce our energy costs. To see this you just need to look at the pipelines design - it runs from the oil fields in Canada directly to the gulf, where it will be shipped out to the world. The basic fact that no one seems to grasp is that domestic production goes to the highest world bidder, there are no incentives to restrict its sale to the US market. When you hear "drill baby drill" just remember that it is a rallying cry to increase oil company profits, not US prices or security.

If we really wanted to cut our energy prices we would be concentrating on producing energy that can not be sold on the world market, like solar, wind, and hydro. Unfortunately, that won't happen any time soon because the Neanderthals in power want to make sure that their sugar daddies can sell every drop of fossil fuel they can find, never mind what it does to the country. We are doomed by the dollar.

Great post, you have hit several points that people, especially the President's haters, choose to ignore. I just wonder if the day will come when a barrel of crude is pulled from the ground and the Earth just caves in on itself.

I thank you all for a very lively and engaging discussion about various aspects of the oil and gas markets and how they effect each of us here in the US. The point of my video for Reuters was to highlight the outsized role that Saudi Arabia plays in oil production in world in advance of the upcoming OPEC meeting later this week. While I can't readily address every issue discussed here, I think there are a few areas I can shine some light on.
The first is OPEC. While OPEC is a huge component of the world's oil market, they alone do not determine the cost of a barrel of oil and by extension a gallon of gasoline. Oil markets are global, complex and unable to be controlled by any one faction, company, group or country. It is a dynamic place where many a proud entity, thinking themselves bigger than the market itself, have been laid low. The wreckage of such giant players; NG clearinghouse, MG, Enron, Amaranth and many others prove that the market has a habit of laying low, those that they were in control of prices. Given the relative stability in the oil market at the present time, I wanted to identify the single most influential factor in the marketplace and make people aware of what the pressures were and what was at stake. I believe I succeeded in that goal.
The second is the role of the President of the United States. My purpose wasn't to change anyone's opinion of the President; I believe that if you are an Obama supporter or opposer, nothing will change that.

But rather to point out the pressures and issues that high gas prices presented to a president seeking re-election. While it is true that the Obama administration has made little secret of their distaste for conventional oil and gas and basic economics dictates, that the higher priced these fuels are, the more attractive the very expensive and as yet uneconomical alternative energy sources favored by the administration become. In an election year those policies become toxic to Obama as the average consumer/voter suffers as he pays the price at the pump. High gas prices will hurt Obama in the voting booth come November. So rather than suffer that fate, the administration has reached out to Saudi Arabia to pump more oil. More oil on the world market = lower gas prices. Lower gas prices = a less angry public. A less angry public = a better shot at a second term for Obama.
The third issue is that Saudi Arabia has to weigh the interests of the Obama administration against their own self-interest. They are going to try and find that "sweet spot" in oil prices, where it's not too low as to hurt their revenue stream and not to high as to tick off the President. That is the balance the Saudis will try try to strike and the thing to watch will be their production numbers over the next few months. I predict we will see a pretty stable oil market from now until the election, with the price of oil hanging around the $80 to $90 a barrel range.

Finally, I want to clear up a few misconceptions. By law the US cannot export most grades of crude oil. We are not a net producer of oil. Given the amount of oil reserves that exist within US territory, it is entirely possible that we could become more independent of foreign oil than we currently are. However, the administration has made it very clear by its actions that drilling for our own domestic oil reserves is not a priority, therefore we continue to import oil from the Middle east.
As to the Keystone XL pipeline; it is not being built to export imported Canadian oil from the Gulf of Mexico. While the terminus of the pipeline will be be near the US Gulf coast, the reason for that is that 75% of the United States's refining capacity resides along the Gulf coast between Texas and Louisiana. What the US has been exporting is the refined products from crude oil. There are no legislative restrictions on the export of such items as gasoline, diesel fuel, heating oil, jet fuel, etc. The refineries location near the Gulf makes it an ideal and economical place to transport their products to the most profitable markets.

I have also just added a price chart for the price of gasoline. The chart shows the futures price of a gallon of gas from 2008 until the present day. The EIA estimates that the price at the pump is roughly $0.70 higher than the futures price. That is a national average price and is subject to some variations by state and locality. This should lay to rest what the price of gas was at any point since 2008.

"High gas prices will hurt Obama in the voting booth come November. So rather than suffer that fate, the administration has reached out to Saudi Arabia to pump more oil. More oil on the world market = lower gas prices. Lower gas prices = a less angry public. A less angry public = a better shot at a second term for Obama."

So when gas prices were very high a few months ago, and all the conservatives were screaming; "why doesn't Obama do something about these high has prices???".... Obama did take action, the prices have come down, and now your claiming it's just a ploy to get reelected. Please!!!!

You're attempting to pass your view off as an intelligent, objective analysis of the situation, when it's really nothing but a partisan rant. You're not fooling anyone.

Hookerman - You are free to interpret my comments any way you wish. I never said that Obama's actions to lower gas prices were a "ploy to get re-elected". What I am pointing out is a political reality regardless of party: if Americans are suffering from difficult economic times i.e. high gas prices, it hurts the incumbent in office. Bill Clinton's "It's the economy, stupid" campaign was very effective because it pinned the economic downturn on Bush the elder in 1992, resulting in his loss of the election. It is not my intention to fool anybody, my views and analyses are published on multiple forums to spark thought and discussion. The rest is up to you.

So what you're saying Chris is that you were not trying to be partisan in any way, you were simply commenting on what happens during an election year, and Obama just happens to be the incumbent running this year for reelection. Is that it???

Well then let's look at this statement of yours; "While it is true that the Obama administration has made little secret of their distaste for conventional oil and gas and basic economics dictates, that the higher priced these fuels are, the more attractive the very expensive and as yet uneconomical alternative energy sources favored by the administration become."

While it is true??? I'm sure you know what weasel words are, and you probably don't want to be accused of using them, so do you want offer a little substantiation to that comment so we can all rest assured that you are being objective in your "views and analyses"?

Hookerman - I suggest you actually read what I write and not try to read into every statement and divine a hidden meaning. It has been the stated policy of this administration, in particular by Energy Secretary Steven Chu, to make alternative energy sources competitive with traditional oil and gas sources. There are two ways to do this: subsidize the development of alternative sources on a massive scale or make traditional energy sources more expensive so the difference between the two is smaller. This is part of the public record. I have to ask, why is it so important for you to try and make this into a partisan political discussion? If you take issue with anything I wrote that is your prerogative and you are clearly entitled to your opinion. I never claimed that what I offered was an impartial and objective analysis, what I produce is my opinion. As for "weasel words", I don't use them. I say what I mean. However, the same adjective could easily be applied to someone who hides behind a pseudonym.

Read what you write??? I actually directly quoted what you write. And if you don't know what weasel words are, they are words aimed at creating an impression that something specific and meaningful has been said, when in fact only a vague or ambiguous claim has been communicated. So, for example, when you say; "While it is true that the Obama administration has made little secret of their distaste for conventional oil and gas and basic economics dictates...", you are employing weasel words by claiming something to be true while offering no citation, or quote to back up this claim. All I was asking for is some substantiation to this statement. And to simply say; "it's part of public record" is not an example of responsible journalism.... not for someone who claims to publish articles in multiple forums.

Mr. Henwood, It is statements like these that lead to the belief that there is an anti-Obama bias to your article.

"As to the Keystone XL pipeline; it is not being built to export imported Canadian oil from the Gulf of Mexico. While the terminus of the pipeline will be be near the US Gulf coast, the reason for that is that 75% of the United States's refining capacity resides along the Gulf coast between Texas and Louisiana. What the US has been exporting is the refined products from crude oil. There are no legislative restrictions on the export of such items as gasoline, diesel fuel, heating oil, jet fuel, etc. The refineries location near the Gulf makes it an ideal and economical place to transport their products to the most profitable markets." Your words.

The point was made that many conservatives mislead the people into believing that this pipeline will help provide more availability and lower prices at the pump for America and clearly it isn't about that at all. It doesn't matter if it is crude or refined, the point is that it will be shipped to the global market and more that likely will go to other countries. This pipe line may create a few thousand jobs while it is being built but other than that there is no tangible benefit to Americans.

Mr. Grant, the inherent design of a pipeline is specifically with the purpose of eliminating supply constraints. In ye case of Keystone, such a project would indeed do the same. This can be illustrated by a rightward and increasing shift on the demand curve for the global market for oil. This is an extremely simple case of how even base economics are forgotten or scoffed at to illustrate the true benefits that an industrial society brings to its people.

Oops, I meant supply curve... Sorry for any confusion

Good, insightful article, Mr. Henwood. Thanks for your thoughts on the oil markets - I'd be interested in reading more about OPEC and what your suggestions would be to supplace their influence in the world markets.

btw- the section titled "Local Voices" on The Patch is intended to be op/ed. For those reading with their eyes closed or who have recently chugged a gallon of bleach, I provide the following:
com·men·tar·y; noun: The expression of opinions or explanations about an event or situation: "an editorial commentary".
Thanks for playing "I'm an idiot - watch me blog" Mssr. Hookerman.
-TD

An editorial commentary is not excused from basic journalistic integrity, such substantiating that which is passed off as facts. When a commentator states; “I feel that…” or “it is my belief..”, then no substantiation is required since he is simply expressing his opinion. When he states; “the facts is…” or “while it is true that….”, then he is not expressing an opinion, but implying a fact, and it is not unreasonable to ask for substantiation to that implied fact. If you will notice, I’ve asked Mr. Henwood to substantiate his “truth” several times, and he has failed to do so.