A Funny Thing Happened on July 15th

Bush removed the executive order banning offshore drilling. Look at how investors (Obama calls them speculators) have reacted. They now are starting to believe there is risk in owning oil futures. Oil is down almost 15% and we can only imagine how much more this would drop is congress would follow suit. I know the left would argue that oil development in the future can't help prices now. But what they don't understand is that markets in general and oil specifically are based on politics, psychology, data, and emotions - as well as how much oil is coming out of the ground today or tomorrow.

I got the chart from NYMEX. And you can too right here.

Markets Work...if we let them

President Bush FINALLY recinded the Presidential Order that has prevented drilling on the US continental shelf. While critics (ie political hacks who like high oil prices) say it will take time for any new drilling to bring oil to market. People who understand markets know that prices reflect everything that is known at the time futures contracts are purchased.

So guess what happened.

Oil dropped by almost $10 a barrel in one day.

All while the congressional ban is still in place. If congress removes their ban we would see significant and immediate drop in oil and gas prices.

As I have asked before. Who wants lower gas prices?