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RUSH: As you know, ladies and gentlemen, the big-time oil executives are being grilled up on Capitol Hill. Yesterday it was the Senate Judiciary Committee. Today some House committee is ripping into them. But an interesting story here just posted at AmericanThinker.com by Marc Sheppard. Senator Chuck Schumer, who is on the Judiciary Committee, says that coercing Saudi Arabia to increase oil production by one million barrels a day would drop the per-barrel price by $25, saving Americans 62 cents per gallon at the gas pump. Now, wait a second. It was just barely a week ago -- I remember this, we had the audio on this program -- it was just a week ago that Senator Schumer said drilling in ANWR was a waste of time because the same amount of oil, a million barrels a day coming from ANWR, would only ease oil prices by a penny. So a million barrels of oil from Saudi Arabia would drop the barrel price $25, according to Senator Schumer; a million barrels a day from ANWR would drop the barrel price by only one cent.
 "Schumer repeated these words almost verbatim when grilling oil company executives during yesterday's Senate Judiciary Committee hearings." It was May 13th that he said this, and then he repeated this yesterday: "If Saudi Arabia were to increase its production by 1 million barrels per day that translates to a reduction of 20 percent to 25 percent in the world price of crude oil, and crude oil prices could fall by more than $25 dollar per barrel from its current level of $126 per barrel. In turn, that would lower the price of gasoline between 13 percent and 17 percent, or by more than 62 cents off the expected summer regular-grade price -- offering much needed relief to struggling families." And he said that to the oil company executives yesterday. And yet, I remember, we had the bite, Schumer out there at a press conference saying a million barrels from ANWR would only reduce the price of gasoline by one penny. It's not even necessary; don't talk to me about ANWR, not even necessary.
From the Washington Post today: "'Skyrocketing Oil Prices Stump Experts.' -- Confused about oil prices? So are the experts. Executives from the giant oil companies say it's partly the fault of 'speculators' or financial players. Key financial players say it's really a question of limited supply and expanding global demand. Some members of Congress accuse the Organization of the Petroleum Exporting Countries for bottling up some of its production capacity. And OPEC blames speculators, wasteful US consumers and feckless US policy. Almost everyone points at China's growing appetite for fuel." Now, the second page of this story, Jeffrey Rubin, chief economist of CIBC World Markets, says, "The basic story that has brought oil from $20 to $130 dollars is that world demand is growing robustly when world supply is not. As a result, we need ever-higher world oil prices to kill demand in the [industrialized countries], which is exactly what's happening." So here's a guy that's happy, we need to kill demand in the industrialized countries. It's their fault. We need to kill demand. In other words, we better get used to doing away or doing with less. |
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I remember when we first started talking about this last week, I spent a little time trying to explain how these high prices at some point are going to burst because the markets will not be able to support this. Look at what's happening with American Airlines, and they're just the first. You know, Jet A fuel, which is essentially kerosene, has now gotten to the point they can't raise their fares and stay competitive with other airlines. The published fare price is an advertising thing or a marketing thing. They don't want to raise the fare. But they have to recoup some of this increase in the cost of fuel if they hope to keep flying. So what American's done is announced they're going to ground some airplanes, will be fewer flights, less capacity. They're also going to start charging for your first bag of luggage. And you can look for a whole lot of incidental charges to be added on as well. I'm telling you, let's say that the price of kerosene per gallon got up to ten bucks, that would have an effect on the aviation industry that it might not be able to deal with. At some point these prices have to come down, because markets simply won't support 'em. You can sit there and say all day long it's a great thing because we're going to reduce demand.
 Look, there are stories out there, people are changing their diets; they're changing what they eat before they are spending less on gasoline. You all know about the American love affair with the automobile and driving around and so forth, and in most cases, people have to. I don't know how much joyriding goes on out there anymore; a lot of commuting to and from work, going to grocery stores, shopping and things that you have to do. It's not something you just park the car and take the bus, and a lot of Americans don't want to do that. Now, there's a story from the UK Telegraph today by Ambrose Evans Pritchard, and the headline is: "'Oil's Perfect Storm May Blow Over' -- The perfect storm that has swept oil prices to $132 a barrel may subside over the coming months as rising crude supply from unexpected corners of the world finally comes on stream, just as the global economic downturn begins to bite. The forces behind the meteoric price rise this spring are slowly receding. Nigeria has boosted output by 200,000 barrels a day (BPD) this month, making up most of the shortfall caused by rebel attacks on pipelines in April. The Geneva consultancy PetroLogistics says Iraq has added 300,000 BPD to a total of 2.57m as security is beefed up in the northern Kirkuk region. 'There is a strong rebound in supply,' said the group's president Conrad Gerber. Saudi Arabia is adding 300,000 BPD to the market in response to a personal plea from President George Bush, and to placate angry Democrats on Capitol Hill -- even though Riyadh insists that there are abundant supplies for sale."
So basically what's happening here, summarize this, why oil prices could come down: "What we know is that the International Monetary Fund has cut its forecast for world growth for 2008 three times since last autumn to 3.7pc, and the United Nations is predicting just 1.8pc -- technically, a global recession. The major oil forecasters have halved their estimates for crude demand growth to 1.2m BPD." So a slowing economy will equal less demand, which will of course reduce some of the pressure on supply. "The US added just 7pc of crude demand growth from 2004 to 2007, compared with 34pc for China, 25pc for the Middle East and 17pc for emerging Asia. Goldman Sachs argues that fuel prices in most of these countries are held down by state controls, insulating demand from the effect of any global downturn." Anyway the story goes on, and we'll link to it at RushLimbaugh.com, but essentially there are pressures out there, market forces, market pressures, that are going to bring down the price of a barrel of oil and accompanying drop in the price of gasoline.
It just stands to reason. I get up every day, I see this 130 bucks, 135, whatever, to 132, and frankly I've gotten to the point of laughing at it here because it's almost become -- I know it's real, but it's not real. You watch; this is not going to be supported. All these doom-and-gloomers out there saying $12-, $15-a-gallon gas is inevitable. Well, maybe in 15 years, who the hell knows, but not next week, which is the tenor of these news stories. At some point, markets work. Now, you know what a gallon of gasoline is in Saudi Arabia? It's like 75 cents. In Egypt it's 91 cents. Even China, in order to promote economic growth, is subsidizing gasoline prices for the people who have cars there. The price of gasoline in China is under two dollars, and maybe under a dollar. There are a lot of places in emerging economies where the government -- ChiComs are ChiComs but they understand they need economic growth, and they need disposable income in the back pockets of their citizens. They're subsidizing gas purchases. That's why people in these emerging countries are able to go out there and buy gasoline out the wazoo. That's probably going to change as well as these prices skyrocket because the government's are not going to spend that kind of money. So you watch, folks, it's going to work out. |
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RUSH: Chuck Schumer yesterday talking to Big Oil execs, said if Saudi Arabia would increase their output by a million barrels a day, it would reduce the per barrel price by $25 and the pump price by 62 cents a gal. One million barrels additional from Saudi Arabia, $25 cheaper to buy a barrel of oil, 62 cents cheaper to buy a gallon of gasoline. April 28th, Chuck Schumer at a press conference.
SCHUMER: What does the president do? He takes out the old saw of ANWR. ANWR wouldn't produce a drop of oil in ten years, and it's estimated that if they drilled in ANWR, in 20 years it would reduce the price one penny. We've been pushing for a long time for energy efficiency. We believe in a price-gouging bill so that the big oil companies can't collude. We believe that there's too much speculation in the markets, and we believe that ought to be reined in.
RUSH: And not one thing that you believe in will produce one drop or BTU of energy. So there you have it, your brilliant Democrat Party, Senator Schumer, a million barrels from America reduces the price a penny. A million barrels from Saudi Arabia reduces the price $25. Look at this. PMSNBC.com: "Even the Cost of a Barbecue is Heating Up." Oh, let's just scare everybody, let's just scare and make everybody chaotic and miserable. "Hamburgers and hot dogs? Check. Lighter fluid? Check. Beer? Check. More money? Americans are about to fire up their barbecues for the start of the summer cookout season, and one thing has become painfully apparent: It's going to cost a lot more than it did last year to roast a burger, or just about any other barbecue favorite, on the grill. Food inflation is the highest in almost [twenty years], driven by record prices for oil, gas and mounting global demand for staples such as wheat and corn, and for proteins such as chicken. And that's reaching into Americans' backyards." Does this story ever blame the people responsible for all this? |
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Let me see if I can find the word Democrat in this story. Not here. Why is corn so damn high? Why is wheat so damn high? Because of all these biofuels. We're growing food and not using it to feed people, and it's not reducing the price of gasoline, is it? Is it, folks? Are all these biofuels putting any downward pressure on the price of gasoline? "'I'm finding myself questioning every purchase, wondering if it's gonna get eaten or if we really need it,' said Tony Caballero, an advertising and marketing consultant, as he filled his cart with paper plates at a Food Emporium in New York City. 'When you do your everyday shopping, you try to cut corners. But it's a shame to have to scale down when you're trying to throw a party.' ... Basic economics account for most of the increase: Bad weather has hurt crops...'" Oh, give me a break.
"'Basic economics account for most of the increase: Bad weather has hurt crops, economic prosperity has driven up demand in developing countries, and surging fuel prices have raised transportation costs. Economists and food scientists have argued that biofuel production is also a major factor in rising food costs, particularly corn, and that it should be scaled back. Meat and poultry executives have come out against federal ethanol mandates, which they say is driving the cost of corn higher. Carol Tucker-Foreman, food policy expert at Consumer Federation of America, said high-fructose corn syrup can be found in just about anything you'd find at a cookout or picnic. 'The backyard barbecue is where you'll see the most impact from the government's decision to subsidize the use of food to put fuel in our cars,' she said. 'From the ketchup to the paper plates, these are the things that are going to cost you a lot more than they used to. And this is just the beginning. Next year, it'll be even more expensive just to stay home and make burgers.'" (Gasp!) Tremble, tremble.
 Well, ladies and gentlemen, I've often said over the course of many broadcast years, if they're going to throw a recession, don't participate. Many of you have smirked and said, "Yeah, easy for you to say." Well, I'm having a huge barbecue on Sunday. I've got a bunch of people coming over. I'm not using paper plates. I'm using plates that I paid for long ago, won't cost a thing to use these plates. I'm using real standard plates, the kind of stuff you put on a table when you have dinner. No paper plates, no plastic cups, none of this. Well, I do have some plastic glasses that insulate the contents, there's no sweating in the glass. But I own those, too. I have ketchup, mustard, onions, I have this stuff stocked. I have purchased this well in advance. I have my beef; I've got the chicken; I've got the hot dogs; I've got the burgers; I've got the ribs; I've got it all! I got it from Allen Brothers. You cannot get this stuff in stores. Allen Brothers makes beef for steakhouses. You know, real USDA prime, you go to the grocery store and it says prime on it, it isn't in many cases, sometimes it is. Real prime -- they only make two and a half percent -- all the beef in America is prime and it goes to places like Allen Brothers that supply steakhouses, but you now can get this beef from them as I do, and you can get Wagyu hot dogs or Wagyu burgers, which is more than Kobe, regular steak burgers in whatever size you want, 6, 8, 12 ounces, regular size hot dogs, jumbo hot dogs, you're going to have a whole selection here, burgers, hot dogs, ribs.
You're going to have some chicken out there, and the vast majority of it is already in the freezer. It comes flash frozen, so it's just like you got it fresh. The amount of money I'm going to spend on my barbecue this Sunday, I probably spent it three weeks ago. Nobody's going to have to go to the store. Well, the chef will have to go get some stuff, but minor. This story does not relate to me. Paper plates, plastic knives and forks at a barbecue at home? I can understand if you're going to go to neighborhood picnic in a park or something, you know, take that stuff, but come on, there are ways to avoid buying paper plates. If you want this Allen Brothers stuff, go to ABSteaks.com. This is the best beef I've ever tasted. When I send out invitations to my parties, people that don't get invited hint and beg to come if they know I'm serving Allen Brothers. You got the Rush PAC, you have a Rush-More PAC, you can get 8 free steak burgers, an executive EIB apron in the Rush-More PAC, you got a Rush Sample Pac, also get the 8 free steak burgers in that. I warn you, once you do this, nothing else will be good enough. ABSteaks.com or call 800-260-0111. And don't let this stupid story from the AP ruin your barbecue. Everything goes up every year. It's the way of the world.
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| RUSH: One more thought on oil. One thing you have to keep in mind about big oil companies. This is just something that you've gotta keep in mind. What do they do? Obviously, they produce energy, they find oil, they drill for it, they bring it up, they send it off to refineries, in some cases they own the refineries. But like every other company, they have a duty to their shareholders to keep the stock price up. And so, it may well be that some of these companies don't want to really massively increase the amount of oil they produce every year because they don't want to overshoot one year so that they can't meet their expectations the next year. They want to be able to show a steady increase in production for their stockholders and so forth. You can imagine if whatever their production is last year, they up it by 20% next year. Ooh wow, really good, then the year after that they can only up it ten. You know what Wall Street analysts are going to say, "Big Oil in big trouble, can't meet demand, stock price goes down, not good." I am saying this to you only because there's more oil out there than anybody can shake a stick at. It's just a question of going to get it. |
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