Bush Removes Executive Ban, Oil Drops $9 a Barrel

Oil futures are “a contract to buy specific quantities of a commodity,” in this case, oil, “at a specified price with delivery set at a specified time in the,” wait for it…future.

So what happens when a person of influence makes a move that could affect the price of a certain commodity, a move that might put more supply on the market?

The price drops:

In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

Now isn’t this interesting?

Imagine what would happen if Congress did a rectal-cranial extraction and did the same:

Traders took a look at a feisty and aggressive George Bush and started selling the market well before a single new drop of oil has been lifted. What does this tell us? Well, if Congress moves to seal the deal, oil prices will probably keep on falling. That’s the way traders work. They discount the future. Psychology and expectations can turn on a dime.

Wouldn’t it be great if there was actually a free market, and we didn’t have to sit and beg these socialist nit-wits for the right to use the natural resources in America?