Wednesday, August 18, 2010

If there is more oil in the federal reserves than ever before, why are gas prices so high?

The oil reserves serve two purposes.. One is to cushion the market during a potential crisis.. The other is to raise the cost of oil by taking some it off of the market.. This reduces supply available to consumers while demand remains the same and increases the price. In the end, oil companies win against those greedy consumers.If there is more oil in the federal reserves than ever before, why are gas prices so high?
What's that got to do with anything? The reserve is not ever used, so it has no impact on the market, except in as much as the government continues to buy oil to add to it, so there is that extra demand in the market to further add pressure to prices. And of course it is at an ';all time high';: it is only added to, and never consumed.If there is more oil in the federal reserves than ever before, why are gas prices so high?
The government chooses not to release any. It is there for an emergency purpose only and primarily national defense use. In fact, domestic production would be allocated to consumers in an emergency such as a war. That is also a good reason for us to increase our domestic production in spite of the environmental wackos protest.
Because they are reserved for interruptions in production like wars hurricanes boycotts etc. not released to control prices. If every time there was an increase in the price of oil the government put the reserves in the market we would not have any left for emergencies.
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