Tuesday, August 9, 2011

Gas Prices Up Despite Use of Oil Reserves

When Obama release the oil from the oil reserves, the drop in the price of gas was miniscule. After a month, price of gas rebounded a dime higher Obama was anticipating. Currently, the price of gas is starting to drop, but through an unwelcome reason. The economic collapse and high unemployment is driving the demand of gas down. Although it was another alternative to lower the price of gas, it was not the choice Americans imagined. Instead, if Obama followed Bush and declared oil independence, we should see a dramatic slide in the price of gas. As evidence, the price of oil dropped more than $9 a barrel when Bush announce on July 14, 2008 an end to the presidential moratorium on drilling. Within two weeks, the price was down by $22. However, this is not Obama's style. The president likes to do things the hard way.

(Washington Times) More than a month after the Obama administration said it would tap the country’s emergency oil reserve to try to combat supply disruptions in the Middle East, gas prices at the pump actually have risen 10 cents.

President Obama had hoped the move, coming at the onset of the summer driving season, would temper the loss of supplies due to the ongoing civil war in Libya. Working with international allies, the U.S. said on June 23 that it would release 30 million barrels of oil over 30 days, while other countries with strategic reserves agreed to release another 30 million, in staggered sales during July.

And prices at the pump did dip, at first, from a nationwide average of $3.61 down to $3.55, according to AAA. But by last week, they had rebounded and the price per gallon stood a dime higher than when the administration first made its decision.

“Although it helped initially to pull down prices it was probably too little,” AAA Mid-Atlantic spokesman John Townsend said, pointing out that the nation consumes as much as 20 million barrels of oil a day. “This is just a drop in the bucket.”