Why can't we flood American crude market with the federal reserve crude to lower prices of petroleum products?

Question

Curtail selling diesel fuels to China, which I read has driven the price of diesel up.

Answer 1

It's a bit more complicated than that. You have to be able to flood the market for a length of time and be perceived to be able to indefinitely. Otherwise the speculators will just hold out till the reserve runs down to danger levels. That's why it's important to get the oil supply up and demand down.

Don't worry, this is happening, but will take 6 months to happen. When supply rises, which it must in response to higher prices, and demand falls due to the now exorbitant price, the speculators will panic, flood the market and we'll be down to $50 a barrel. Market forces will sort it out as it always does. In any speculative market, the bottom falls out and the last ones in get burnt. Classic scenario.

Unfortunately, any government intervention to try and ease the pain will only make things worse.

Answer 2

One, the reserve in held in cases of EMERGENCY, not high prices.  Two, its an extremely short term fix.  Then WHAT?

Answer 3

The price of oil is not being driven up by lack of demand, it is being driven up by speculators.  Putting more oil on the market from the US reseve will not cause the prices at the pump to drop.

Answer 4

Why cant we just stop using oil, and start giving more tax breaks to people who buy electric cars, and more tax breaks to american car companies who make them?

Answer 5

And then what do we do when the petroleum reserves run out and have to be replenished at outrageous prices while the rest of us continue burning those same high-priced fossil-based fuels, having gotten a bit of a break on the price for a few months?  It sounds good, but it's a quick and temporary response to what is a long-term problem.

Answer 6

China is buying from the world market, not from us

What you want is a  stop gab solution that will only be temporary.

Oil prices in the USA are based on world spot prices.  

Here is an idea who's time has come.

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I believe the oil companies need to be nationalized and the profits go back to the people in the form of lower taxes.Same with our communications systems.

Where I live in China as a transplanted American, both are nationalized and a gallon of gas costs about a buck less, and my cell phone bill is obscenely little. About $15 a month and I use it extensively.

Plus, I pay zero sales tax, and tax on a home is very small to non existent, plus I have no income tax, despite that I make considerably more then the average person.

There is a lot of revenue to be made off of both which gives the people more disposable income. A win for the government, a win for the people, a win for our economy. It will just pizzzz off the fat cats, one that some love to support, yet they don't give a rats behind about their supporters.

We often hear that the oil companies have a vested interest to give alternative energy only lip service.  What better way to take care of that problem then put energy in the hands of the people.  We need a Manhatten type of program to help eliminate our dependance on foreign oil while putting on the fast track alternative energy sources.  The oil companies will fight both till all we will have left is a drop in the bucket of what we really need, all while we, the tax payer, continues to give them welfare bucks.

What I fail to understand, people will fight tooth and nail to support the oil companies while continuing to pay high energy prices (at a profit that lines the pocket of the fat cat, who doesn't give one hoot about them.) and pay high taxes to boot. Kind of like, shooting themselves in the head just to prove they can. Makes no sense whatsoever.

I'm a capitalist, but when it comes to this, I must put my foot down and say, enough is enough.  

Case in point, in Venezuela, who has nationalized oil, they pay 13 cents a gallon.

http://fabulously40.com/article/2171/Pri...

http://www.nationmaster.com/red/graph/en...

Think about it.

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Life is so simple, but we insist on making it complicated

Confucius

551 - 479 BC

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Peace

Jim

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Answer 7

Well it is good to bring the soring prize of oil down, so the world can be able to afford it, as it is all produce of oil are very expensive, and i think if they continue to make the prize of oil very hard to get,well, there will be an other war,and this time the war spread all over the world and have the 3rd world war

Answer 8

The world is supposed to have economic flow. If you stick to only just ourselves then what? We will need oil once our backup is out. It is more complicated than we think. It isn't a supply and demand matter. If that were the case then gas should've been higher than it has been. The supply and demand effect only takes place when we start getting smart about how we use fuel. Instead we keep on being ignorant and we continue to bye the fuel. So it gives America no choice but to contiue buying it. If we are smart about how we make choices then the oil companies won't be getting that much sale.