Intervening in markets is less science than art, requiring the subtlest judgment and perfect timing. Intervention will work in the short term if it pricks a speculative bubble. In the longer term, however, it can only be successful if it catches an underlying dynamic of the market. But to intervene against the overwhelming market tide is futile. The euro satisfies neither of these conditions . . .
Oil is a slightly different story.
Bold talk and modest intervention may indeed combine to propel its price lower. For one thing, and especially after OPEC's recent production increases, there is no global shortage of crude oil. The fuel squeeze to which Clinton has responded by releasing 30 million barrels from America's strategic oil reserve is mainly the result of a lack of refining capacity . . . Coinciding as it did with concerted central bank action to defend the beleaguered euro, it has brought the issue of direct market intervention by both producers and consumers to the fore . . . One question being asked by analysts is whether the U.S. use of the SPR and OPEC's generally low-key reaction to it presages a period of greater cooperation between producers and consumers, which have traditionally been at odds over a number of sensitive issues, quite apart from differences over OPEC supply quotas.