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Oil Traders: Tapping Reserve Was 'Genius' Move by Obama
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| Contributor | DFWDem |
| Last Edited | DFWDem Jun 24, 2011 04:35pm |
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| Category | Analysis |
| Author | John Melloy |
| News Date | Thursday, June 23, 2011 10:00:00 PM UTC0:0 |
| Description | With US crude prices already down 16 percent from their April high, pundits and politicians everywhere were asking Thursday: "Why would President Obama tap the Strategic Petroleum Reserve when oil prices were already falling?”
The answer is simple: Obama knew this would have the maximum impact, hitting speculators on the chin, according to traders.
“Arguably the timing of the release is genius,” said Stephen Weiss of Short Hills Capital. “If the SPR had been released as crude worked higher, the effect would have been relatively momentary, but releasing it now, with the momentum on crude prices turning down, will add to the price decline as speculators hit their stops and margin limits more quickly forcing them to sell.” |
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