Analysts: There's Danger In Bush Oil Reserve Plan
A rumor of war -- or something more "insidious." Last night, President George W. Bush offered America his formula for energy security, which included doubling the Strategic Petroleum Reserve (SPR) to 1.5 billion barrels of oil by 2027. While some found mediocrity in aspects of the president's plan, two observers see harbingers of danger.
Ashraf Laidi, chief foreign-exchange analyst at CMC Markets, thinks the oil buildup signals an imminent invasion of Iran. He told "Street Signs" that the volatile Persian Gulf is "being filled with [military] ships" from both the U.S. and the Islamic theocracy.
Laidi pointed to an incident a fortnight ago, when "brief, unsubstantiated rumors" that an American vessel had "hit" an Irani ship led to a short-lived spike in oil prices. Considering the impact of oil prices on bond and currency markets, Laidi told CNBC's Erin Burnett he believes the SPR buildup is needed to stabilize oil and stage-manage the global economy's "soft landing" -- ahead of a major conflict with fundamentalist Tehran.
Raymond Learsy, author and blogger on The Huffington Post, scoffs at Laidi's conjecture, calling it "rather farfetched" to connect the strategic-reserve increase with Gulf tensions. Instead, the author alleges that Bush's motives are "more insidious" -- and cites alarmingly "close ties" between the White House and oil-company executives. Learsy, a critic of Saudi and OPEC business practices, supposes that the president is merely using the SPR for "supporting a plunging oil price."