Oil Prices Tied To Election?


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Two years ago, Bob Woodward, a Washington Post reporter, made an ominous statement regarding gas prices that we are seeing played out now:

"They could go down very quickly. That's the Saudis' pledge." According to Woodward, Prince Bandar bin Sultan, Saudi Arabia's ambassador to the United States, "told President Bush that the Saudis would cut oil prices to ensure a strong economy for Election Day."

And it's not only the Saudi's:

U.S. oil company executives also possess the power to allow price drops for the election. They have enough room to play -- including last year's collective $100 billion in record profits and Exxon Mobil's own near record $10.6 billion profits this past quarter. Oil executives are full of fear over new leadership in a Congress that would investigate them.

I'll be curious to see how much their earnings drop for this quarter.

OPEC has agreed to start cutting oil production in November:

OPEC agreed last month to reduce output by 1.2 million barrels a day starting Nov. 1. OPEC ministers will review their cuts when they next meet on Dec. 14 in Abuja, Nigeria.

The Organisation of Petroleum Exporting Countries has decided to slash its oil output by more than expected, as it seeks to reverse heavy falls to crude prices.

If this sounds like a liberal fantasy, there are conservatives who believe it too:

The [Washington Post] survey also showed that suspicions about the steep drop in gasoline prices over the past two months aren't limited to the nation's liberal strongholds. Sixteen percent of people who identified themselves as conservative Republicans, 26 percent of white evangelical Protestants and 29 percent of Southern residents think the plunge in prices is linked to the coming election or other political reasons.

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Read More About:   Business | Elections | Politics | United States