Strategic Petroleum Reserve (SPR) Update - Dec 17
Posted: Sat Dec 17, 2022 2:29 pm
Since March of this year, President Biden has withdrawn 180 million barrels from the reserve. In early November, he shrank the country's oil reserve to its lowest level since 1984, Axios reports. Biden authorized the release of oil from the Strategic Petroleum Reserve to help bring down gasoline prices, which were soaring in early 2022. < Also, to buy votes in the midterm elections.
On December 16th Old Joe announced that the United States will soon purchase 3 million barrels of oil in order to replenish the country's dwindling Strategic Petroleum Reserve.
The big picture: The Biden administration tapped into the country's Strategic Petroleum Reserve earlier this year to slow down rising gas prices.
Driving the news: The Department of Energy said the new purchase is "a good deal for American taxpayers" since the repurchasing price will be lower than the $96 per barrel average price it was originally sold for.
The move will also "strengthen energy security," the DOE said.
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MY TAKE: The purchase is only 3 million barrels during the month of February, which compares to draws from the SPR of close to a million barrels per day thru November. MORE IMPORTANT IS THAT THE DRAWS FROM THE SPR HAVE STOPPED. Since the U.S. is now a net importer of crude oil and refined products, we are a "Price Taker". OPEC+ has total control over of the world's oil price and they need higher oil prices to balance their budgets. U.S. oil production will decline in Q1 like it does each year and some Russian oil will be taken off the market, so all the OPEC cartel needs to do is stick to their current official quota (which they are already producing below) and the OECD petroleum inventories will continue to decline.
On December 16th Old Joe announced that the United States will soon purchase 3 million barrels of oil in order to replenish the country's dwindling Strategic Petroleum Reserve.
The big picture: The Biden administration tapped into the country's Strategic Petroleum Reserve earlier this year to slow down rising gas prices.
Driving the news: The Department of Energy said the new purchase is "a good deal for American taxpayers" since the repurchasing price will be lower than the $96 per barrel average price it was originally sold for.
The move will also "strengthen energy security," the DOE said.
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MY TAKE: The purchase is only 3 million barrels during the month of February, which compares to draws from the SPR of close to a million barrels per day thru November. MORE IMPORTANT IS THAT THE DRAWS FROM THE SPR HAVE STOPPED. Since the U.S. is now a net importer of crude oil and refined products, we are a "Price Taker". OPEC+ has total control over of the world's oil price and they need higher oil prices to balance their budgets. U.S. oil production will decline in Q1 like it does each year and some Russian oil will be taken off the market, so all the OPEC cartel needs to do is stick to their current official quota (which they are already producing below) and the OECD petroleum inventories will continue to decline.