Monday, February 27, 2012

Strategy for Oil Reserves

There has been talk this weekend of the United States selling some of its strategic oil reserves to ease oil and gasoline prices. It is a good thought, but this is not the right season for it. It is a move that would be better timed in June or July, when oil is seasonally at its highest prices. If the U.S. labor market continues to strengthen, as I believe it will, and if global political tensions remain unresolved, or hurricanes enter the Gulf of Mexico, U.S. gasoline prices will be near $5 per gallon this summer. At that point, a bit of price relief will make a real difference in the economy.