Wednesday, August 31, 2005

the national oil reserve?

On the news this morning: the President is to open the national oil reserve to ease prices at the gas pump because Hurricane Katrina wiped out refineries in New Orleans.

Something here isn't adding up. If the problem is a lack of refineries, how will increasing the amount of crude oil help? I mean, aside from marginal effects on the price of crude.

From the article, it looks like I'm not the only one puzzling over this question:
The government's oil ``is not going to be of much help unless we get refineries running again,'' said Adam Sieminski, global oil strategist at Deutsche Bank AG in New York, before the announcement. ``Releasing oil from the SPR right now would be actually inappropriate because there would be no place to put it.''

No comments: