With oil below $70 a barrel it might be a good time to add to the US Strategic Petroleum Reserve.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCSSTUS1&f=W
DB2
4 Likes
Low relative to immediate past prices, but still a bit on the high side of the post-fracking era. Oil prices ranged between $40-60 from the latter years of the Obama administration up through the Ukraine invasion. You probably have some room to let oil prices fall a bit further before stepping in and putting a floor under them. And with the U.S. becoming the world’s largest oil producer and a net petroleum product exporter over the last few years, there’s less of a strategic need to top up the SPR quickly.
2 Likes
Looks like the helots are trying to talk oil down.
I think I saw a blurb a week or two ago about some SPR purchases. Small, but still a slight replenishment. I suspect it has to be done slowly to avoid sudden price changes. It’ll be nice to see the SPR fill up (at prices below 70) by the end of 24 or 25.
4 Likes
In August
DOE is looking to purchase crude for $79/bbl or below, less than the average $95/bbl DOE received when it sold emergency SPR crude in 2022
DB2
2 Likes
I really don’t understand this part of it. I generally agree that government transactions ought to be transparent and in the large available to the public. However, for certain things, for strategic things, this transparency is sometimes sufficient to exist after the fact. I think in the case of the SPR, they should, opportunistically and slowly, make their purchases on the open market, while attempting to not excessively affect the prices one way or the other.
With oil prices hovering below $70 a barrel, it does seem like an opportune moment for bolstering the US Strategic Petroleum Reserve (SPR). The SPR serves as a critical cushion against potential supply disruptions, and purchasing oil at lower prices could be a strategic move to enhance national energy security while being cost-effective. It’s also an interesting point to consider how these additions to the SPR could potentially impact market perceptions and future price movements. It’ll be intriguing to see if this suggestion gains traction among policymakers and how it aligns with broader energy strategies.
2 Likes
Oil is around $80 a barrel right now.
US Cancels Latest Oil Reserve Refill Plan Amid High Prices
https://www.bloomberg.com/news/articles/2024-04-03/us-cancels-latest-oil-reserve-refill-plan-amid-high-prices
DB2
Lets give “big gummit” credit for having a functioning brain this time. Remember the questions asked, when more oil was being bought for the SPR, in 2008, when the price was crowding $100 and the media was chattering about “peak oil”?
Maybe…
Apparently “big gummit” is asking Ukraine to spare Russian refineries to protect American car drivers from higher prices. Or maybe something to do with November outcomes…
The Captain
2 Likes
Sometimes they do, sometimes they don’t. Back in 2020 when oil prices crashed, Senator Schumer squashed the purchase of oil for the SPR because it would have been an “oil industry bailout”.
DB2
2 Likes