The first step to being an educated voter is locating the right documents. Step No. 2 is actually reading them. This monthly press release from the U.S. Energy Information Administration is required reading in my opinion for anyone who claims to be a patriot and to care about the difference between propaganda and truth.
There’s nothing earth-shattering in here. Just a little explanation for why oil prices have stayed high despite the announcement that the U.S. and other nations were going to release 60 million barrel of oil from their strategic reserves into the global market. Read the first two or three paragraphs and skip the rest.
The most interesting nugget in here is buried lower down. It’s a prediction as to how projected increases in oil consumption are going to be met next two years: “EIA still expects that the market will rely on both a drawdown of inventories and production increases in both non-OPEC and OPEC countries to meet projected demand growth.”
Why is that interesting? Because it implies that existing oil stockpiles are so ridiculously high that they can actually be used to offset increased daily demand. That’s pretty friggin big.
This huge inventory of oil supports one of our contention here at Cynical, which is that prices have been going up this year almost entirely due to speculation. Rather than due to supply and demand as is routlinely reported in some of the oil pricing stories we see.
The bottom line is that the best way to store oil is in the ground, but you can’t trade those oil futures unless you actually have the oil in man-made storage facilities. So we pump it out and let it sit around. How’s that for a glaring and illogical inefficiency?