It seems that suspending the gas tax will only have Americans a few hundred dollars at most over the summer. However, I do agree with McCain that stopping adding to the SPR is the way to go. In fact they seemed to have added another 208,000 barrels to the SPR this week and they paid $116 a barrel for that oil.
Why are they buying more oil to fill the thing at this outrageous price? They need to stop filling the thing when prices are high and ramp up the purchases when prices are lower. The classic doubling down strategy. I mean the thing has 710 million barrels of oil in it already. What constitutes full capacity? Or do they just buy more on some kind of autopilot plan?
I think demand reduction is an important tool to combat high oil prices. The government shouldn't be buying $116 a barrel oil just to stick it in some salt-mine somewhere. They should just wait and fill the thing up to the brim at $80-$90 oil instead. Also the idea that the US government will not be buying at really high prices might drain some speculators out of the market. Oil demand according to the IMF is already going down as economies start to slow.
Also I seriously doubt that Americans will be driving like crazy during "driving season" with gas prices at $3.60 a gallon. They might be taking vacations as close to home as possible (or not at all) to save money. They might even stay home and fill up the backyard pool and spend their time off in their own houses doing repairs and enjoying themselves in their own cities. I'm still short oil since I really don't think the demand metrics will be able to hold prices at this level and the supply concerns seem to be more and more smoke in mirrors and "fears of uncertainty" then real concrete disruptions.
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