John McCain's silly analysis of oil prices

Via TNR's Chris Orr, John McCain made this fantastical claim about President Bush's influence on the price of crude oil:

"In case you missed it, soon as the President announced that we were going to end the moratorium on offshore drilling the price of a barrel of oil went down $10," the presumptive Republican nominee said at a Wilkes-Barre, Pennsylvania town hall.

Orr links to an CNN.com article that instead attributes the decline to reports of "higher-than-expected stockpiles of crude and gasoline," but isn't the problem with McCain's claim more fundamental? Bush's action lifting the presidential moratorium on offshore drilling has no effect unless Congress also acts. Here's the New York Times:

By itself, the move will have little impact, because Congress enacted a moratorium in 1982 that remains in place.

So why on earth would the market care? When McCain said "The issue of economics is not something I’ve understood as well as I should," he wasn't kidding.

Comments

[David]

Brendan, the market would care, because the price of oil depends not only on current supply and demand, but on anticipated future supply and demand. Any action that makes the oil market believe that supply is more likely to increase in the future will reduce the price today.