I guess the SPR Threat was politically motivated
When Oil and Gas prices were last at these levels President Obama utilized the threat of releasing the SPRs to put a lid on the rampant speculation in the oil markets. And yes with oil inventories at record levels here in the US, there is rampant speculation in the oil markets once again. The oil market is being pegged right alongside the S&P 500 almost tick for tick, regardless of overflowing supplies at Cushing, or large weekly builds in total US stocks.
No more elections to campaign for
President Obama and his advisors know this correlation by now, and they have fought this nasty correlation for consumers at the pump, with releasing or the threat to release the SPRs which sends the market in the other direction as oil can drop $20 on any release.
At the time of the last threat critics said that the president was politically motivated in utilizing the SPR release to manage oil and gas prices lower before the election so that high gas prices wouldn`t become a central voting issue, and hurt his chances of being re-elected.
High Level Politicians only care about Votes
Well, given that the last time prices reached $95 a barrel the Whitehouse started talking up the SPR release idea only six months ago, and oil prices have been over $98 a barrel for WTI and gas prices are higher than they ever have been for this time of year and set to go higher, and we haven`t heard a single mention of the SPRs. It is obvious that once elected Obama has conveniently forgotten about consumers’ pain at the pump due to rampant oil speculation.
Further Reading - QE3, SPR Release and Gasoline Prices
Gas Prices Continue to climb with S&P 500
Gas prices are set to jump as gasoline futures for April are 16 cents higher than the March contract, so consumers are going to be in for a shock at the pump if this pace continues. I would hate to see where gas prices will be if Bernanke infused liquidity sends the S&P 500 to 1650?
Good thing we don`t have a robust economy!
I guess it is a good thing that Iran came back to the negotiating table, and we are overflowing with supplies right now in the United States. I would hate to see where oil and gas prices would be if we actually had a threat to supplies in the Middle East, or a tight oil market from a supply standpoint.
How high would Gas prices be without Saudi America?
Gee, I guess we are so lucky the US is producing 7 million barrels per day, the best in over 20 years. Furthermore, we would really be in trouble if US GDP was over 2%! How about if unemployment was below 7% or banks were actually lending to small businesses? How about if the economy actually provided an abundance of jobs for college graduates so they could pay off their student loans? In short, the economic fundamentals matched the glorified stock prices! How high would gas prices be then?
Too bad for Consumers, Obama has forgotten all about your pain at the pump!
What a joke markets have become, how out of whack they are with regard to the underlying fundamentals of the global economy. Moreover, president Obama has shown his true colors regarding oil and gas speculation, as long as he gets elected, he doesn`t really care!
Further Reading - Higher Gas Prices & Lower Take Home Pay will Kill Rally