How dangerous is it for President Trump to artificially hold the price of oil down until the Mid terms?
Surely he should be allowing market forces to prevail?
Thanks.
Hi Dan...quick question...
Re: Hi Dan...quick question...
IMO taking oil from the SPR to control the price of gasoline is never a good idea. The SPR is there to insulate the U.S. for a year if a nuke goes off in the Middle East.
Also, by keeping oil prices artificially low, it can make the problem worse in the long-run. This world runs on oil. The U.S. cannot meet future oil demand on its own. We need more exploration outside of the U.S. and that will not happen if Trump starts manipulating the oil price by using SPR oil.
However, I heard this morning that they are talking about releasing 30 million barrels from the SPR. Today our refineries consume about 7 million barrels per day more than we produce. So, 30 million barrels is less than a week's supply. Plus, it will take months to set up the draws and physically release the oil. It will hardly be noticed in the weekly numbers. Regardless, U.S. crude oil inventories should continue to fall through the September.
Also, by keeping oil prices artificially low, it can make the problem worse in the long-run. This world runs on oil. The U.S. cannot meet future oil demand on its own. We need more exploration outside of the U.S. and that will not happen if Trump starts manipulating the oil price by using SPR oil.
However, I heard this morning that they are talking about releasing 30 million barrels from the SPR. Today our refineries consume about 7 million barrels per day more than we produce. So, 30 million barrels is less than a week's supply. Plus, it will take months to set up the draws and physically release the oil. It will hardly be noticed in the weekly numbers. Regardless, U.S. crude oil inventories should continue to fall through the September.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group