The Supply Side

apparently has something to do with prices. Who'd have thunk it?

so anyway, the sweet, sweet science of economics rears it's cute little head again. It seems like only yesterday I was opining on the subject:

Short term, drilling here and now will bring down the market price of oil. As in tomorrow. The prospect of an increased supply on the global market will quell the speculation market and reduce volatility. It's like ECON 090, people.

Right, then. It seems that President Bush's speech today on the issue of domestic drilling rattles a few cages. The August futures price for oil fell $9.26 in the wake of GWB's remarks.

Just the prospect of increased supply against today's demand lowered the price. SHAZAAM! It's like it's science or something.

As Mike of Cold Fury fame put it: "Why, it's baffling". Ace was similarly gobsmacked by the news. Quoteth Ace:

Supply, demand. Present, future. Why, someone could make a mark in this world suggesting these concepts were somehow linked in some fashion.

Note that it was not the August, 2018 futures price for oil that fell 6.3%. Not ten years out as the leftards would have you believe. No, next month's futures fell on the strength of the remarks of a lame-duck President.

All the cool kids are linking back to Larry Kudlow over at NRO. He's got the goods.

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?

Democrats keep saying that it will take 10 years or longer to produce oil from the offshore areas. And they say that oil prices won’t decline for at least that long. And they, along with Obama and McCain, bash so-called oil speculators. And today we had a real-world example as to why they are wrong. All of them. Reid, Pelosi, Obama, McCain — all of them.

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.

Amen, Brother. Like I said, it's like it's science or something.

We can drill our way out of this. Every new hole we put in to our ground to extract the juice lowers the price.

This material will be part of your Final Exam. thatisall.