RITA COULD EFFECT OIL MORE THAN KATRINA

3,413,850 barrels each day. That is the total output of refined oil that the refineries in the Galveston, Texas area produce each day, slightly more than the daily output from the refineries in the area effected by Hurricane Katrina. The futures speculators are already throwing a panic into the market by raising the price of a barrel of oil by $10 today. Unfortunately for the last two years the futures market has driven the price of oil creating a false bubble that has consistently kept prices much higher than the supply and demand market actually warrants. For instance when King Fahad of Saudi Arabia died recently the futures market went up $4 a barrel because of fear that a new King, "would change oil production, " in Saudi Arabia. Now more than two years ago Fahad had a stroke and his brother took on the duties of King and then upon his death became King. Nothing changed during the preceding two years and nothing changed after Fahad's death, yet the $4 price hike did not correct itself as has been the case since the out of control futures market began fear speculating at the beginning of the Iraq war. In an interview that I heard last week with Steve Forbes, he stated that the bubble will burst forcing the market to correct itself. That is the way a free market economy works. Forbes believes that this correction will take place in the first six months of next year and the price of a barrel of oil will drop to between $30 and $40 per barrel dropping the price at the pump to below $1.50 a gallon. Even with all of the over speculating by the futures market the loss of oil because of Katrina and Rita, approximately 29% of all oil production in the United States, once again stresses the problem that the left and environmentalists have created by forcing legislation that has prevented domestic oil finds from being harvested and new refineries being constructed. The last new refinery was built in the early seventies and as we all know oil consumption in the States has increased many times over since then. The time has come to force the issue and quit bowing to the left's agenda especially when it comes to energy consumption in this country. This is also a National Security issue. Suppose a terrorist took out one or more refineries. The recovery would not be as swift as it has and will be after a hurricane! There is NO excuse for a natural disaster to cause the panic over oil that Katrina created and that I'm sure Rita will repeat, especially since the loss of production is so preventable by harvesting our on oil and increasing our refinery capabilities. Until the Congress gets the guts to finally stand up to the left and the environmental nuts, we the people will continue to pay the price from our pocket books to the pump!

Ken Taylor