According to Financial Times’ Martin Wolf oil prices are up. Barack Obama is to blame. Drilling in the U.S. is the solution. This is the mantra from the president’s opponents. All presidents tend to get the blame for high fuel prices. But with the price of gasoline nearing $4 a gallon, Mr. Obama is getting it by the barrel load.
This may be good politics. But it is absurd. Oil, unlike natural gas, is a globally traded commodity, whose price is set in world markets. In 2010, the U.S. produced 7.8 million barrels a day, 9 per cent of the world’s supply. Unlike Saudi Arabia, the U.S. lacks spare capacity: it is a price taker. Responding to his critics, Mr. Obama said: “We are drilling more. We are producing more. But the fact is, producing more oil at home isn’t enough to bring gas prices down overnight.” These remarks are correct, except for the last word. Producing more oil would have next to no effect on oil prices….
More? Check out http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/financial-times/prepare-for-a-new-era-of-oil-shocks/article2383828/
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