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Time For Another SPR Crude Release?
Now that the impact of the first (of many) SPR release moves courtesy of an Obama administration desperately in need of political brownie points has been beyond wiped out, it is time for the IEA to leak rumors of another emergency meeting, and for our brilliant and fearless leaders to announce they are about to sell another 30 million barrels. After all there is just under 700 million barrels in the SPR now (pro forma for the first release).
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Peak Hype
Either pull the plug on the free money engine or watch as gas prices kill any recovery.
Wouldnt want to be an oil "speculator" right now, thats one big ass crosshair on their backs.
BTFD. It's that simple.
We are all oil speculators now.
Sad, but true. We're all commodities, equities, and 4X specs, despite the fact that some like myself hate it. I'd much rather focus on the things I love than trying to keep ahead of the FED. This cannot end well.
Its hurricane season in the GoM.. keep depleting those SPR reserves boys, can't wait to see what speculation looks like when a nice CAT 4 winds itself up in those nice warm gulf waters...
I think that’s at least part of the strategy, to scare these speculators and manipulators out of the market. Too bad it can only be accomplished by governments stepping in as an even bigger manipulator.
When the IEA meets again, the dumbest thing they can do is orchestrate another release. If the process becomes a feit accompli, then everyone just builds it into their models. It’s the element of surprise that makes it work, if at all. I‘d like to see them come out of the meeting and announce future repurchase plans to build the reserves back, especially if Goldman is short big-time.
Anything to get their "big ass crosshairs" fixed on something other than Ag for a change works for me!
Wouldn't it make more sense to empty the gold reserves? Can't eat it, isn't useful for anything other than plating toilets. The only people that want it are the domestic terrorists that carry pocket size Constitutions and machine guns with tea bags dangling from the barrel. It's time to rid ourselves of that barbarous relic while it's in bubble land.
Barack Hussein Obama could use the monies to build some of these peace centers - http://www.youtube.com/watch?v=xcXFxbx1Y4M
Yeah we seized all the real money from hardworking people then quietly replaced it with Tungsten. Mission Accomplished!
Land of the Fleeced, Home of the Slave!
It's really worth nothing anyway since the litmus test is whether you can eat it or not, goats think the dollar is great though.
One thing I don't understand is why the PigMen are so interested in keeping the price down and hoarding it? It's probably nothing I'm sure they are just doing a public service.
That's even better. Let those greedy white men on Wall Street take all of the shiny rocks in exchange for our soon to be blossoming green shoot dollars. Suckers.
Barack Hussein Obama can build those peace centers in all of the neighborhoods where his constituents are community organizing into lynch, I mean, flash mobs.
The neighborhoods will be empty after the relocation to the FEMA camps, so there isn't much point building there now.
Go For It Oblamma! Gut America! There's still plenty to loot and the livestock still haven't come out of their swooning. Do it while the fix is in. Because it isn't going to last.
Grab the free stuff while it lasts.
It's Obama oil.
Supply is not the is core price increases are do to that fucking witch Doctor at the Fed. I guess they will pull this bullshit till we are really out of reserves. For fuck sake these guys are going to kill us alll....
The Pentagone will have it's say on that, bet you...they do need A LOT of oil.
Repeating the earth is flat will not make it so.
The logic has been that the release was castastrophic, err meaningless, er malvolent, er.
A little logic. If oil goes to 150 plus during the next six months, is that a failure of the release program? NO. It means it might/would have gone higher without the release.
Austrians have no logic, there is no realilty other than what a monkey can type.
Repeating the earth is flat will not make it so.
So why are you repeating that the earth is flat? Here's an idea. The economy needs a boost right now, and you Keynesians know what needs to be done, so why don't you go ahead and empty your savings and use it to buy lots of iPads. Afterwards, you can destroy them and buy more. This is your patriotic duty as a Keynesian. We expect you to fulfill your obligation.they want a correction in oil, then just withdraw the IMF's support on all these ridiculous bailouts
Yes, it must be time for the US president responsible for closing down drilling in the US to sell more oil from the piggy bank...and I hope he does it. I really hope he does it...today even. I hope he announces a bigger release. In fact, it would be great if he sold all of it.
After all, the looting of the US long ago began in DC. Let us hope for even more blatant instances of this looting.
And while they are at the task of looting the oil, confiscate all US 401k accounts, too. Make them the last resort buyers of US T Bills.
Raise taxes too, while also increasing social spending for people who do nothing to add to the economy. Announce new defense spending initiatives, while you're at it. Confiscate people's gold, too. Why not?
Let's just get it on, finally.
All roads lead to Saturnalia
I have to wonder if anyone in DC or Brussels has ever heard of the Law of Diminishing Returns.
This is great. I need to see another CNBS headline:"Release of of strategic oil preserve 'genius' move by Obama."
The SPR is there to provide fuel in emergency situations.
The US military consumes 320K barrels/day. The "emergency" the SPR is most particularly for is:
The US is about 4% of the world's population and consumes 24% of the world's annual oil consumption -- and at some point the world might object and try a blockade of imports -- and were I doing that against a country with America's might, I would damn sure pick at a time when there's nowhere to get that 320K bpd. Meaning, when the SPR is empty.
The might goes away if there is no fuel for the ships or planes. It's why Japan attacked Pearl Harbor, after all. FDR's oil embargo left them no choice.
Oil is civilization's lifeblood. It's also the military's lifeblood.
Considering the vast majority of that 320Kbbl/d demand is overseas, I don't see what use the SPR is to the military. Every single oiler on duty gets its initial fill stateside before deployment, then refuels overseas. The fuel they get overseas is aquired at the nearest distillate facility with a contract. This is almost always a US naval base, but that base itself gets its fuel on the open market.
The purpose of the SPR in military terms would be ground fighing within the lower 48 - a most unlikely scenario.
Russia is nearby, to our north and to our far west. The idea behind the SPR was, how do we support a European defense against the Soviets, when Russian attack subs are on the prowl in the Atlantic, Pacific, Indian Oceans? Or when Saudi Arabia would go into a revolutionary scenario? There was a time when an enemy would play cat and mouse with the U.S. Navy on the high seas....
Sure, but the European support argument ignores the reality that any shooting war with NATO on one side and CCCP on the other, wouldn't last much longer than a few days, max. Even if we did want to support Europe with crude, the war would be over before the tankers arrived, if they didn't get sunk.
The Saudi argument is valid, but that's not a military objective. That's a domestic supply objective, and the real value that the SPR provides. Of course, none of that matters when government leaders lay their cards out on the table in plain sight.
"If you're playing poker and you haven't figured out who the sucker at the table is, that's because you're it."
You are right that military use of the SPR is probably obsolete at this point (maybe air tanker resupply???), but anything with "military use" attached to it has a feel-good factor for politicians, and the SPR is pretty much an all-around good thing IMHO as an emergency paddle for navigating Shit Creek.... I DON'T like its abuse by cheap politicians, though....
In the case of a real military emergency, which is ostensibly what we think the SPR was created for, that 320k bbl per day would triple overnight, but, in a real emergency domestic production would simply be prioritized and diverted to military and other emergency uses anyway. People forget that the USA might not be part of OPEC and we use way more than we produce, but we still have a lot of domestic oil. The founding logic behind the SPR in 1975 was to keep the markets stablein the possible face of another embargo, in other words economic. Later it was supersized a couple of times, and was really more about supporting prices for domestic production at a time when wells were shutting down and getting capped because oil was so low. Remember when Clinton left office WTI crude was under $30 per bbl. It was $18 in 1998. It went from $28 to $98 in almost a straight vertical line following BushCo's announcement in November 2001 his intention to fill the SPR. Because of the date, two months after 9/11, and the strategic in it's name, and the other tags like emergency, or energy security, people just got used to thinking only of it in military terms. But it was always about economics.
What I am wondering as I write this is why all of you otherwise intelligent ZH'ers are taking the government accounting of both the SPR capacity and it's sales as a sort of god given fact when we all know what any data containing numbers that comes from our government are actually worth. If I have to say that any such data is utterly without worth then I am disappointed indeed.
When you piss in the wind, you get your pants wet. These doofuses in the BHO Administration seem to think that it's 1995, and there's oodles of spare Saudi sweet crude capacity to scare off the oil bulls. Morons!
Is it time to consider a empty SOR?
*Pukes....