Still, while John McCain and the Republican Party are waving their arms that the only way to solve the current "oil crisis" is to let oil companies drill under caribou and fish, that pesky old capitalist feature of supply and demand has put the breaks on runaway oil prices. Now if only the U.S. dollar could bulk up a little.
Oil prices rise on mixed dollar
VIENNA, Austria (AP) -- Traders bid oil moderately higher Wednesday amid mixed signals on the strength of the U.S. dollar and ahead of weekly U.S. crude inventory data expected to show a slight increase in oil supplies.
A weakening dollar has helped boost oil prices this year, because dollar-denominated commodities are often used as hedges against inflation and a falling U.S. currency. The euro rose Wednesday to $1.4919 but the yen was weaker against the greenback, trading at $1 to ¥108.93.
Light, sweet crude for September delivery rose 72 cents to $113.73 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract dropped $1.44 overnight to settle at $113.01 a barrel. ...
... Investors are waiting for a report by the U.S. Energy Department's Energy Information Administration on U.S. oil stocks for the week ended August 8 later in the day. The petroleum supply report was expected to show that crude stocks rose by 500,000 barrels, according to the average of analysts' estimates in a survey by energy research firm Platts.
Investors "have taken profits as they've seen demand destruction in the U.S. and they're seeing it spread a little into Europe," said Jonathan Kornafel, Asia director for brokerage Hudson Capital Energy in Singapore. ...
... The Platts survey also showed that analysts projected gasoline inventories to have fallen 2.2 million barrels and distillates to have risen 1.9 million barrels during last week.
Any fall in gasoline supplies would come despite indications that the high price at the pumps is putting a crimp in demand.
Vienna's JBC Energy cited the latest report from MasterCard Advisors, showing that "U.S. gasoline demand last week was almost 4 percent lower compared to the same week in 2007 despite a considerable decline in retail prices."
Nope. No blatant evidence there that conserving oil is a good idea. Better drill. It's politically imperative for Republicans, after all.
Some Conservative Republicans Balk at Drilling Compromise
WASHINGTON -- Some conservative Republicans are balking at an effort to compromise with Democrats on allowing more offshore drilling for oil, even as more key Democrats appear to be softening their opposition to such a move.
The moves come as opinion polls show rising levels of public support for increased offshore drilling.
House Speaker Nancy Pelosi (D., Calif.) said Monday on CNN's Larry King Live show that she would consider allowing a vote on legislation to permit drilling in more offshore areas if it were part of a broader energy package that included adequate safeguards for the environment, as well as support for renewable energy.
Ms. Pelosi and other top House Democrats have blocked Republicans from offering measures that would overturn the 27-year-old ban on drilling in many parts of the outer continental shelf. Earlier this month, the Democrats' likely presidential candidate -- Illinois Sen. Barack Obama -- also said he would be willing to support an expansion of offshore drilling as part of a broader bipartisan energy bill.
Republicans have used the offshore-drilling issue to paint Democrats as out of touch with ordinary Americans and beholden to environmental groups that oppose any relaxation of the current drilling ban. Arizona Sen. John McCain, the Republican's likely presidential nominee, has made Sen. Obama's opposition to offshore drilling a feature in recent ads critical of his Democratic rival.
But the drilling issue could lose its power as an electoral wedge if both parties agree to the concept put forward by a group of Republicans and Democrats. Their proposal would open additional acreage in the Gulf of Mexico off Florida's western coast to drilling, and also allow Virginia, North Carolina, South Carolina and Georgia to "opt in" to drilling off their shores if their legislatures approve.
The plan would also raise billions of dollars for conservation and energy-efficiency programs partly by making oil companies no longer eligible for a manufacturing tax credit and repealing other tax breaks. Some estimates have put the potential savings from such a move at $13 billion over 10 years.
Some conservatives worry that a deal would remove party differences on what they otherwise see as one of the Republicans' best issues for winning over voters in the November election. Conservative radio-show host Rush Limbaugh has accused the Republicans who favor the compromise of giving a "gift" to Sen. Obama and other Democrats seeking election this fall.
Among many Republicans, "there's a desire to not solve this problem" of gridlock over energy policy, said one of the Republicans supporting the compromise, Sen. Bob Corker of Tennessee. Sen. Corker added that "many people in the Republican Party are missing the point that this is a strong pro-[oil] production bill" and that Republican leaders "made a mistake" by not immediately endorsing it.
Some Republicans decry tax provisions in the proposed compromise. Senate Minority Leader Mitch McConnell (R., Ky.) has expressed objections to the proposal to eliminate the oil companies' eligibility for a tax credit. Through a spokesman, Sen. McConnell declined to be interviewed.
And former House Speaker Newt Gingrich, who has spearheaded a campaign in favor of increased domestic drilling, assailed the compromise in a column published Tuesday on the Web site of the conservative Human Events magazine, saying it amounted to "an $85 billion tax increase disguised as an energy bill."
The skirmishing over the compromise has placed Sen. McCain in a delicate spot. When the proposal was announced earlier this month, Sen. McCain's aides released a statement saying he would oppose it on the grounds that it would raise taxes. Speaking to reporters last Friday, however, Sen. McCain said he had "not seen or examined all the aspects" of the proposal and that "obviously we have to come together" on energy policy.
Will reality play a part in the invented "debate" as to whether to open up drilling in environmentally protected areas? Only time will tell, though the deciding factor will likely be the fact that we live in a world where oil companies rarely feel any type of disappointment.