Big Oil absolutely needed to tie up more cheap leasehold rights [besides the ones already held where they showed no intention whatsoever to drill and pump]. That we heard day in, day out.
The sane view was that the pump price had been temporarily hiked to gouge consumers, but then to discourage any lasting long-term elasticity of demand effects, the price would be dropped [but always there's the 100% proportional pump price gain as the well head price goes up, with a lesser drop downward when well head prices fall - a curious asymmetry in supply-demand dynamics that way].
We were reassured, it's not a manipulated market at the refinery level.
Ask Michele, she will assure you again, if you'd like.
Guess what?
During those summer months when the noise was loudest, as NYT today [Sept. 11, 2008] reports, things were a bit different than we were being told then:
It remained unclear Wednesday [Sept. 10] exactly how the Saudis lost the argument behind [OPEC] closed doors. And despite the OPEC communiqué, it is far from clear that OPEC members will actually reduce their output. After a short night, Saudi officials were quick to reassure markets.
“Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil. The policy has not changed.”
The Saudi message is to wait and see where demand is headed before eventually paring supplies. The Saudis made their strategy clear Wednesday in informal talks and briefings with some oil industry analysts and reporters, but as is their custom, they would not speak for attribution because they did not want to appear to undermine a collective OPEC decision.
In June, King Abdullah pledged that his country would pump at full tilt to bring prices down. In August, the kingdom increased its production to 9.7 million barrels a day, the highest in three decades. Saudi Arabia is now producing around 9.5 million barrels a day, 600,000 barrels a day more than its quota.
[emphasis added]
Now expect our beloved Bachmann-led GOP contingent to tell you soon that it was their bleating that caused the market reversal. Talk tough, get results, etc., etc.
For truth: Read the text.
The reversal was a Saudi commitment clearly made at or well before the point in time when the Chicken Little sky-is-falling bleating reached its crescendo.
So sit, wait, and be ready for the next lie, our beloved GOP types taking credit for the price drop.
And then consider, why did you not then in June-August read about the Saudi actions pumping more oil in our STRIB or our PiPress. I suppose news is what you make it.