jtomm:
Excellent post. There are 3 issues, it seems to me.
OIL prices, GASOLINE prices and SPR.
I absolutely agree that it is POSSIBLE that oil prices will come down in a day or two IF New Orleans gets devastated AND if Bush announces that he will cover drop for drop any loss in production via the SPR (and assuming the SPR is undamaged). But, those are a lot of IF's.
On the other, let's say New Orleans escapes with just the usual disaster from an C4-5 and Bush doesn't announce SPR coverage, then it is very possible that oil could rocket.
I'm simply staying put UNLESS Bush announces 1M bbl/day from the SPR and the price goes above $75 anyway and if New Orleans gets hit incredibly bad. THEN, I'm selling into it because I think the demand for oil would drop quite a bit as the economy would get plastered. So, if the economy gets plasterd and Bush provides the SPR coverage, then demand is going to drop a ton, but yet reserves would still be there. Thus, I would sell oil stocks.
That has NOTHING to do with gasoline. Bush can unload all he wants from the SPR and it won't affect gasoline. I just filled up my car 10 minutes ago because I think gas is going to go through the roof no matter what.
Len
Warren Buffet: 5 minutes and 17 seconds of pure, unadulterated, bulletproof, flawless logic.
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