February 2000: PBS reports on "soaring" energy prices. Gas, $1.35 a gallon.

GWEN IFILL: Americans have come to count on cheap oil. No longer. Energy prices are soaring. A gallon of gasoline, which cost an average of 92 cents a gallon a year ago, now goes for $1.35 a gallon and higher, up more than 30 percent.

CONSUMER: Well, there's not too much you can do about it. You have to have the gas, so you have to pay the price.

GWEN IFILL: The cost of heating oil in the Northeast has doubled as well, driven in part by the cost of crude oil. The barrel of oil that cost just $11 only a year ago now costs about $30. The last time oil was this expensive was during the Persian Gulf crisis in 1991. The impact has been felt at gas pumps, in homes heated by oil and at airline ticket counters, where $20 fuel surcharges have been added to ticket prices. Federal Reserve Chairman Alan Greenspan and other inflation watchers are taking notice, worried that energy costs could also drive up the prices of other goods. Particularly hard-hit is New England, where three-quarters of the homes are heated by oil. Some low-income residents say they have been forced to choose between paying for food or paying for oil to heat their homes. At a news conference Wednesday, President Clinton announced that he had released $125 million in federal funds to help poor families pay energy bills.

PRESIDENT CLINTON: In the Northeast the impact has been particularly harsh because from the mid-Atlantic states to New England, many families still rely on home heating oil-- a source of heating no longer used in the rest of the country. These families have been especially hard-hit. That is a serious concern, especially because the winter months have been colder this year than in the past few years.

GWEN IFILL: Energy Secretary Bill Richardson admitted today the spike in oil prices caught the administration off guard.

BILL RICHARDSON: Everybody was caught napping. Nobody predicted what would happen. But it's not that we didn't have a response. We have a response, but at the same time we don't intervene, the government doesn't intervene in fuel prices and in oil markets.

GWEN IFILL: President Clinton has dispatched Richardson to meet with the leaders of oil- producing nations Mexico, Saudi Arabia and Kuwait....


http://www.pbs.org/newshour/bb/economy/jan-june00/oil_2-17.html

...to under $0.89 by the end of the year 2000, did they not?

Given the uncertain state of the world's oil markets, and given the very real possibility that world oil demand will soon begin to outstrip world oil production capability, things could get very bad very quickly. I would rather have the strategic oil reserves on hand for a possible emergency than to waste it to artificially suppress prices for a few months.

While on the campaign trail in 2000, George W. Bush told President Bill Clinton how to handle OPEC, in public no less. “What I think the president ought to do," he said, "is he ought to get on the phone with the OPEC cartel and say we expect you to open your spigots."

And in a brilliant, highly educational follow-up comment, Bush informed the audience: "One reason why the price is so high is because the price of crude oil has been driven up."

"OPEC has gotten its supply act together," Bush advised listeners, "and it's driving the price, like it did in the past."

"And," he said in direct advice to Clinton, "the president of the United States must jawbone OPEC members to lower the prices."

http://onlinejournal.com/artman/publish/article_746.shtml

But now, Saudi Arabia is (though they don't dare admit it in public) near full capacity. They can't open more. I believe prices are already higher than they'd like to see.

(Also, that's a different issue from the oil reserves.)