Treasury Secretary Tim Geithner said today that the release of 30 million barrels of oil from the US strategic petroleum reserve was NOT a political move. I do not know which is worse: Is the Treasury Secretary just out and out lying to the American public or does the Treasury Secretary actually believe that this was not a political move? We have a choice between dishonesty and stupidity. Some choice!
The Libyan supply disruption that is the supposed reason for the release of oil began over two months ago. The response of the market was to bid up the price of oil in part due to panic over the cut off of oil from Libya. The price shot up, but prior to the announcement of the new oil release the price had fallen by more than 20% from its high. in other words, the small loss of oil production from Libya had been fully digested by the market and prices had returned almost to the level just prior to the fighting in Libya. So the market had already dealt with the problem, there was no emergency of any sort.
Only after the emergency was resolved did the great Obama decide to open the strategic reserve. A good question is why would he do that? Certainly it was not to deal with supply disruptions; that had already been accomplished. The only possible answer is that Obama wanted to release the oil so that he could claim responsibility for the price drop in oil that had already taken place. Who cares that the 30 million barrels of oil released means that there is that much less oil in the reserve for use in a real crisis. Obama needed a boost to his poll numbers. It was a blatant political move and nothing more.
I cannot be sure, but I think Geithner is too smart to have missed this. I vote for him being a liar rather than a dope.
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