I received this CNNMoney.com e-mail just before 6 PM ET:
Hmmm. So they think it's all on Ben's shoulders.
The headline at the Associated Press's coverage by Adam Schreck says that the drop was due to "bad economic news."
But at least one person quoted earlier today (11:26 a.m., according to the link; HT NixGuy) had a different view, and he said what he said to CNNMoney.com, the same outfit that sent me the e-mail:
But "somehow," Flynn's quote didn't make it to CNNMoney.com wrap-up coverage at its web site. It was essentially all Bernanke, all the time.
How did that happen?
In case you missed it, distinguished economist Walter Williams explained the price drop -- a few days ago:
Some politicians pooh-pooh calls for drilling, saying it would take five or 10 years to recover the oil. I guarantee you we would begin to see a reduction in today's prices even if it (enabling more drilling) took five to 10 years for us to get the first barrel.
It looks like we got some of the price reduction for two reasons besides Bernanke:
- First, George Bush carried out his half of the "Drill Now" deal by issuing an Executive Order repealing his father's previous order against offshore drilling.
- Bush then showed he was serious by forcefully arguing his case at his press conference today.
But as you can see, Old Media appears to be scrubbing the EO's and the Bush presser's relevance to the drop.
A Reuters report I commented on early this morning (at NewsBusters; at BizzyBlog) called Bush 43's EO "symbolic." Will the wire service also call the price drop "symbolic"?
So a mere increase in the likelihood of more drilling partially explains the price drop. Imagine what might happen if the way is cleared.
Another factor may or may not be relevant (I think it is): I learned in that Reuters report for the first time that a related congressional ban on offshore drilling expires on September 30, about 77 days from now. This means that activities that would ultimately lead to the production of oil from offshore sources might begin as early as October 1, unless Congress proactively stops it.
Maybe the information about the Congressional ban's expiration has been out there for a while, but I don't think so. Maybe the Congressional expiration was widely-known in the markets but not to the general public, but I doubt it. After all, for general news, analysts and economists have to wade through the same biased, incomplete, and sometimes incoherent media reports the rest of us must endure. If I'm right, this is one of many examples where Old Media is not merely reporting on the markets, which is their only responsibility, but also affecting them -- which should be, but isn't, out of bounds.
I suspect that the markets, now that the short-lived nature of the congressional ban is widely-known, have realized that an extension of it will be politically difficult, and that traders are starting to place bets that the ban will expire. This may very well put further downward pressure on prices in the near term.
Cross-posted at BizzyBlog.com.
