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As US Prepares To Tap Strategic Oil Reserve, Crude Prices To Surge On Asian Disaster Preparation

Tyler Durden's picture





 

With ICE and CME margin hikes - that last bastion of supply/demand imbalance suppression - no longer having an impact on crude price, it was only a matter of time before the last theatrical measure in the price arsenal was used.  Per Dow Jones: "White House Chief of Staff Bill Daley said on Sunday the Obama administration is considering tapping into the U.S. strategic oil reserve as one way to help ease soaring oil prices." Speaking on NBC television's "Meet the Press," Daley said: "We are looking at the options. The issue of the reserves is one we are considering. ... All matters have to be on the table." There has been support among Senate Democrats for tapping the reserves. Senator Jay Rockefeller on Thursday became the third Democrat to ask President Barack Obama to tap America's emergency oil supply to cool prices that have risen past $100 a barrel on the strife in Libya." What our esteemed politicians fail to realize that tapping the SPR is analogous to Lehman filing an 8K declaring to the world it is now tapping directly into the Fed's discount window for its liquidity - that didn't end too well. The problem with the SPR is that as a non-marginal replacement of supply it is largely a puppet: with a capacity 726.7 million barrels, the SPR holds a 34 day reserve at the US daily consumption of 21 million barrels. The picture is slightly better when considering that the US only imports 12 MMbd, meaning there is a 58 day supply. But the biggest issue that nobody is considering, is that the maximum total withdrawal capacity is physically limited to just 4.4 million barrels per day. In other words, should the MENA escalation flare up, there is no way to physically replace all the lost output. Yet what is most troubling is that even as the US is about to start using up its reserves, Asia is actively shoring up its oil, meaning that as our own oil buffer gets ever smaller, Asia could easily dictate economic terms over the OPEC cartel as soon as a few months from now if the Bernanke liberation wave does not end any time soon.

More on the last ditch attempt at preventing all out desperation at the oil pump as gas now moves solidly into $4 territory across the country.

In a letter to Obama, Rockefeller said a "limited draw-down" from the nation's 727-million-barrel Strategic Petroleum Reserve "can protect our national security by preventing or reducing the adverse impact of an oil shortage."

On Wednesday, U.S. Energy Secretary Steven Chu ruled out releasing oil from the reserve, saying ramped up oil production in Saudi Arabia should lower the crude price.

"That's going to mitigate the price increase," he told reporters on Wednesday. "We're hoping market forces will take care of this."

Just as market forces took care of Lehman once it became known that the bank was a zombie, solely reliant on the Fed for liquidity. This time the liquidity is of a different sort, but the reaction will be the same: how long before our idiot politicians finally understand how the market operates?

In the meantime, CHina's response is by far the more logical one (from Dow Jones):

China will start work on building strategic oil reserve tanks at the north-eastern port of Tianjin by May, China Daily newspaper reported Saturday.

Work will be completed before the end of China's 2011-2015 five-year economic plan, and filling this reserve will start when the oil price is "appropriate", Tianjin city official He Shushan was quoted as saying.

China's efforts to build up oil stocks are closely watched by energy market analysts, as its demand for oil is a key driver of global prices and huge amounts of crude are needed for the project. China imports more than half the oil it uses.

The reserve site in Tianjin is among eight stockpiling bases being prepared in the second phase of China's strategic petroleum reserve project.

These eight sites will have 26.8 million cubic meters of capacity, able to store the equivalent of 169 million barrels of crude oil.

The western countries' energy watchdog, the International Energy Agency, has repeatedly criticized Beijing for not publishing national oil stock volume figures, which are needed to calculate global oil demand.

Sites for other second-phase bases include Zhanjiang and Huizhou in Guangdong province, Lanzhou in Gansu province, and Jintan and Jinzhou in Liaoning province.

China's petroleum reserve capacity was enough for 39 days of consumption by the end of 2010, with this comprising the SPR oil and a further 168 million barrels of commercial reserve capacity, state energy giant China National Petroleum Corp. said in January.

It is not only China: all of Asia is taking the prudent step of preparing for a very long storm. From the FT:

As oil prices spiral higher amid turmoil in Libya, developing countries across Asia are taking evasive action, shoring up their strategic petroleum reserves against the risk of a prolonged supply shock. Their actions could propel crude even higher.

The Philippines, citing events in the Middle East, announced on Wednesday that it would require oil companies in the country to maintain 15 days of reserves, and refineries to keep enough oil to last for 30 days.

Manila’s move is the most visible sign yet of how Asian countries are seeking to improve their oil security amid what is shaping up to be the worst supply crisis since the invasion of Iraq in 2003. Other big regional oil importers are likely to follow suit.

China is the world’s second-largest oil importer after the US. India is the world’s fifth-largest, ahead of countries such as South Korea, France and the UK. But the pair lack a strategic petroleum reserve that can be tapped during a supply crisis similar in size and scope to the ones held by western countries.

Unlike industrialised countries, which built up their stockpiles three decades ago in the wake of the 1973 oil crisis, China only recently began its strategic reserve programme, starting to fill reserves in 2006 and completing a 102m barrel build-out in “Phase One” two years later.

The second phase of the programme will build a further 168m barrels of reserves by the beginning of next year.

When China finishes filling its reserve, which it is expected to do by 2020, it will hold about 500m barrels, equal to roughly three months of imports and the second-largest stockpile in the world.

China’s strategic stockpiling “is likely to be a feature of the global oil market not only this year but this decade”, says Soozhana Choi, head of Asia commodities research at Deutsche Bank in Singapore.

Although purchases are kept secret, analysts and oil traders believe that events in Libya and the prospect of further supply disruptions in the Middle East could boost strategic buying of crude.

“With the expectation that prices are going to rise, they will accelerate the pace of tank-filling,” says K.F. Yan, director at energy consultants CERA in Beijing.

Here is a brief lesson in FIFO/LIFO: as the US is about to use up a whole lot of low cost-basis oil, the expectation of surging Asian demand for crude will send prices skyrockting even more, forcing the US to use up increasingly more cost prohibitive oil. Of course, all of the oil in the SPR will have to be replaced, as the US then suddenly become a marginal buyer of oil at the next price of $100+/barrel, which will also be factored into expectations, which in turn will send the oil price even higher, and by the time this horrendous attempt at damage control is over, gas at the pump will be well over $5/gallon.

But somehow none of this made Meet the Press...

 

 


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Sun, 03/06/2011 - 11:34 | Link to Comment Hdawg
Hdawg's picture

"Senator Jay Rockefeller on Thursday became the third Democrat to ask President Barack Obama to tap America's emergency oil supply"

Given this Morano's famliy it's no surprise is it.

 

Beware The Days Of Purim 19th-20th March 2011

Sun, 03/06/2011 - 11:44 | Link to Comment Michael
Michael's picture

Senator Jay Rockefeller is trying to hold his elitist regime together for his families interests.

Here is how the people of the world feel about the Rockefeller Family.

David Rockefeller confronted at Chilean Airport during vacations (ENG/SPA)

http://www.youtube.com/watch?v=GFWzDFjBKUw

Sun, 03/06/2011 - 11:52 | Link to Comment theXman
theXman's picture

I can't believe how stupid there people are. This is absolutely no the time to use SPR:

1) Libya's lost oil output is less than 1% of global production. What are you going to do when Saudi is knocked out ?

 

2) US economy is less sensitive to oil price than China, why should US sacrifize SPR to lower oil price for China?

 

3) Last but not least, $100 will be the floor price for oil in a few years. In other words, it is very cheap! If we release SPR now, we will need to refill the tanks at higher price in the future. Sell low buy high? Just brilliant.

 

 

Sun, 03/06/2011 - 11:57 | Link to Comment EscapeKey
EscapeKey's picture

4) There's no immediate election of significance.

Sun, 03/06/2011 - 12:30 | Link to Comment spanish inquisition
spanish inquisition's picture

It may be of relevance if you ( a rockawho?) are aware that there will soon be a significant reduction in oil flowing from Libya. Something has to be done to allow troops in legally (more than just 50K mercenaries).

There are obligations to the corporations that hold the rights to the oil, to the corporations that supply the military and to your partners security interests in maintaining a controlled unrest in the area so they may pursue their ambitions.

The worst thing that can happen is peace in the middle east.

Our two weapons are fear and surprise...and ruthless efficiency...

Sun, 03/06/2011 - 13:39 | Link to Comment Blano
Blano's picture

$4 gas is a bummer, not an emergency.

Mon, 03/07/2011 - 06:17 | Link to Comment wintermute
wintermute's picture

Right on theXman,

Game theory would strongly favour leaving the SPR untouched until/if Saudi has production problems. Imagine the political disaster if they ran down the SPR for Libya to find nothing left if Saudi exports halted later.

Points 2 and 3 spot on analysis too!

Mon, 03/07/2011 - 09:30 | Link to Comment Flakmeister
Flakmeister's picture

  I'll quibble with point 2.... Discretionary use of oil is the US is much higher, problem is that a lot of the economy is tied to that discretionary use. I don't think it is as simple as it appears.

I wholeheartedly agree that the SPR should be off-limits except for real emergencies, e.g. Katrina, large scale oil disruption or embargo. 

Sun, 03/06/2011 - 11:57 | Link to Comment Hdawg
Hdawg's picture

Well said Michael,

10 points for telling us race of people ARE the elite regime?

 

Beware The Days Of Purim 19th-20th March 2011

 

Nice one theXman ... breaking up our valid thread.

 

 

Sun, 03/06/2011 - 12:07 | Link to Comment Michael
Michael's picture

Nepotism is a disease. That's all I'm going to say about that.

Sun, 03/06/2011 - 12:55 | Link to Comment Woppopotamus
Woppopotamus's picture

You have got to stop hijacking every single thread. Its making the comments a huge pain in the ass to read.

Sun, 03/06/2011 - 12:59 | Link to Comment snowball777
snowball777's picture

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Sun, 03/06/2011 - 13:18 | Link to Comment Flakmeister
Flakmeister's picture

Completely irrelevant shit as well.. I mean, like not everything is a Jewish Conspiracy... Next thing will he'll be posting "Protocols of the Zionist Elders"

Michael, Take your hate agenda elsewhere.

Sun, 03/06/2011 - 13:34 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Not big on the Jew bashing thing as well. You can't blame a group of people for being smart at business decisions.

I wish my great grandpa started an import • export business in the 20's or started a business that was still booming today. For the most part I see a hard working people who enter business with an eye toward the future. They also teach their kids about life at a young age not leaving this important task to the t.v. or public school system.

Sun, 03/06/2011 - 13:40 | Link to Comment DaveyJones
DaveyJones's picture

I don't know Flak, we really could use a Jewish conspiracy these days I mean how long did they make that temple oil last?

Sun, 03/06/2011 - 13:41 | Link to Comment Orly
Orly's picture

And the endless fish from a basket...don't forget about that one, too.

Sun, 03/06/2011 - 13:53 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Hey, that was Jesus = Special. He was not Jewish per se, born of the holy spirit. Not from under the covers bang,bang. ;-) Just say'n ...

Sun, 03/06/2011 - 14:36 | Link to Comment Orly
Orly's picture

Separating fact from fiction or myth...

and not to be picky but Yeshua bin-Josef was indeed a Jewish rabbi who studied under the tutelage of John the Baptist and in the school of the Essenes.

He rejected the Talmud, the oral Torah (Mishnah...), which basically said that Jews could lie at will to people who weren't Jews, in much the same way that Muslims can treat "infidels" any way they want because they weren't really people.

Jesus rejected this idea out-of-hand, so I suppose one may say that he wasn't a "real" Jew.  When he wanted to take his ideas mainstream, with the secret sponsorship of Joseph of Arimathea, a member of the Sanhedrin, he and his pals went to the Temple with weapons, expecting to prompt a popular uprising that did not materialise.  He got busted and convicted.

A special place was erected for this rebel of the (Jewish...) State and he was nailed (only done for very special convicts...) to a cross and erected directly outside the gates of Jerusalem, so that all who entered or left the City could see that any dissent from the Oral Law would not be tolerated.

Some also say that Joseph paid Pilate to release Jesus but Pilate couldn't just let that slide, so a surrogate was put in his place- the "betrayer" Judas Iscariot.  Jesus may have been married to Joseph's daughter, Mary.

 

Now, this is not to take away anything from their achievements.  In fact, quite the contrary.  Yehsua was a rabbi, so he was well aware of the expectations of the Messiah to the people and Joseph had enough money to make it happen.  Water into wine, the endless fishes, entering the South gate on the back of an ass...

It was manipulation of public perceptions and beliefs, pure and simple.  But think of the huevos it took for these men to try to pull this off!  Against the most powerful empire the world had ever known; against the power of the rulers of the Temple of Jerusalem.  Twenty guys or so go in with swords ablazin'!  Wow.  I'd have loved to have been there that day, I tell you.

That having been said, it is clear that the teachings of Christianity are by far the best thing that have ever happened to this planet and I, being a devout atheist, thank God for that.

Good will always triumph.

Always.

_______

If my opinion offends, I apologise but the facts add up and can be found in the writings of many modern scholars, most notably Joel Carmichael, particularly the book The Death of Jesus.  Fascinating and very, very enlightening.

http://en.wikipedia.org/wiki/Death_of_Jesus_(book)

Sun, 03/06/2011 - 17:27 | Link to Comment pazmaker
Sun, 03/06/2011 - 20:59 | Link to Comment Orly
Orly's picture

Awesome.  Thanks for the link.  I loves me some religious history.

Sensationalistic?  Well, maybe, but the read of Carmichael's book was a rather toguh slog in parts, I will admit.  Dry as dirt.

I appreciate it.

:D

Sun, 03/06/2011 - 13:55 | Link to Comment DaveyJones
DaveyJones's picture

Omega 3 oil, oil again

Sun, 03/06/2011 - 13:43 | Link to Comment Flakmeister
Flakmeister's picture

Cute...

Sun, 03/06/2011 - 13:40 | Link to Comment Blano
Blano's picture

Thank you.

Mon, 03/07/2011 - 01:39 | Link to Comment Michael
Michael's picture

It only took 12 words from my keyboard to get this fabulous discussion going without using any ethnic epithets.

I am proud of myself and all who added to this discussion.

Carry on.

Sun, 03/06/2011 - 17:39 | Link to Comment Freddie
Freddie's picture

Michael - you do know that the Chase in JP Morgan Chase is the Rockefellers.   I think Chase controls Morgan.  Morgan was always a puppet for another family in Europe anyway.

Sun, 03/06/2011 - 12:19 | Link to Comment Twindrives
Twindrives's picture

What dumbass Rockefeller hasn't figured out is that  Obama will use the strategic reserve to fuel Homeland Securities'  plan to crush the citizen's revolution that is coming to the United States of America. 

 

Jets, helicopter gunships, armored vehicles, police forces that Obama will use to crush patriot uprisings. 

Sun, 03/06/2011 - 12:32 | Link to Comment Citxmech
Citxmech's picture

Calling any future uprising the result of "patriotism" misppropriates the word IMHO.  If the population was going to stand up for values articulated in the Constitution, it should have happened after the implimentation of the "Patriot Act," and the sanctioning of warrantless wiretapping, and other Constitutional abuses.

The coming "uprisings" will just be folks who freaking out because they have lost the benefits of our unsustainable lifestyle and now have to confront the reality that most of the world already lives in:  Abject poverty.

Welcome to the backside of the curve...

Sun, 03/06/2011 - 12:36 | Link to Comment Michael
Michael's picture

We didn't have enough Internet power back then. We do now.

Sun, 03/06/2011 - 16:43 | Link to Comment Abitdodgie
Abitdodgie's picture

You forget as 98% of people in America are 14th Amendment citizens, which means they are on board with the Government in the form of contract, so the government can do what the fuck it wants to them.

Sun, 03/06/2011 - 12:42 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Twin, the weapons you mention are very 20th century...

Try this:

 

Non-Lethal Weapons

U

Non-Lethal munitions applications will be used by military personnel to apply the minimum force necessary while performing missions of crowd control and area security at key facilities around the globe. These devices will aid military forces/commanders in situations of hostages rescue, capture of criminals, terrorists, or control of other adversarial persons.

Malodorants and irritants are two types of nonlethal weapons designed to temporarily mark, incapacitate, or drive away persons from an area. Environmental assessments have been performed on the malodorants Bathroom Malodor and Who-Me?, and the irritants Oleoresin Capsicum (OC), CS-Mace, and CN-Mace.

A running gear entanglement system (RGES) is proposed to protect Navy ships in port, and other waterside assets such as museums and marinas. The entanglement device will foul the propeller of unauthorized vessels attempting to approach restricted areas.

A pulsed-energy projectile (PEP) is under development that uses a chemical laser technology to produce a large flash, bang, and shock wave to temporarily disorient and incapacitate individuals in a crowd.

The advanced tactical laser (ATL) concept involves an infrared laser carried in an aircraft for air-to-ground strike missions, providing pinpoint accuracy and minimum damage.

Anti-traction material (ATM) is a very slippery, gel-like substance sprayed on ground surfaces to prevent access to areas by people and vehicles.

Nonlethal airburst munitions are 20mm weapons designed to emplace liquids, aerosols, powders and other objects at a precise location in space.

Thermobaric technology is a nonlethal weapon, in development, that causes extended flash, sound, temperature, and pressure conditions to disorient and/or temporarily incapacitate individuals.

Minor injuries can and will occur (bruises, stings, etc.) to individuals who are struck by payloads of Non-Lethal munitions. In fact, even if properly employed severe injury or death are still a possibility. Non-Lethal weapons shall not be required to have a zero probability of producing fatalities or permanent injuries. However while complete avoidance of these effects is not guaranteed or expected, when properly employed, Non-Lethal weapons should significantly reduce them as compared with physically destroying the same target.

For the guns and ammo folk on this thread, I'll say you do not stand a chance.

You have to get smarter, not stronger. Legends like David and Goliath have survived the test of time for a reason.

Rock paper scissors is also so old school.

Think: Air, Fire, Water...

ORI

http://aadivaahan.wordpress.com/2011/03/04/astrological-and-other-deep-insights-from-ca/

 

Sun, 03/06/2011 - 12:50 | Link to Comment Citxmech
Citxmech's picture

But remember, North Vietnam "didn't stand a chance" either - I've heard it said that they never won a battle - of course they did win the war.

 

Sun, 03/06/2011 - 13:00 | Link to Comment Oh regional Indian
Oh regional Indian's picture

If they had then what they have now....

Microwave crowd control? Subliminal messaging on a massive scale? Micro-nukes...

Also Nam was a war the US was never meant to win. Terrible for the forces.

It was all about DRUGS. As was the Korean War. DRUGS.

And OIL is just another DRUG.

No wars in the last century were fair. They all had pre-meditated outcomes.

As soon as sufficient damage had beed done and loot had been looted, distributed.

ORI

Sun, 03/06/2011 - 13:16 | Link to Comment Orly
Orly's picture

Absolutely corrrect.

The only way we're going to win- if it comes down to it (but I don't think it will...)- is to have a whole load of geniuses on our side who can construct a re-focusing microwave cannon out of paper towel rolls, an old tube of toothpaste and a metal rubbish bin.

In short, we need McGyver.

We have to work with our brains and not set ourselves up to be cannon fodder.

Sun, 03/06/2011 - 13:57 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Zigackly Orly. Smart, not hard. It works every time.

ORI

Sun, 03/06/2011 - 16:25 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

Fighting a giant with a million slings and arrows might work or it might not. Arguably the most in demand commodity on the face of the planet is productive labor. The fractional reserve parasites need it to survive. You want to take them out? Organize a general strike.

Sun, 03/06/2011 - 13:02 | Link to Comment ElvisDog
ElvisDog's picture

Yeah, I say BS to that too. It's a matter of numbers. 300 million civilians versus maybe 10 million police, national guard, etc. The way revolutions work is that initial government response incites more people to join the revolution. There is a tipping point where the numbers just overwhelm the government forces. Also, there is a point where the government forces start to defect to the other side.

Sun, 03/06/2011 - 13:34 | Link to Comment dehdhed
dehdhed's picture

yup, if they start using these tactics, then even this pacifist will begin throwing rocks.

Sun, 03/06/2011 - 13:56 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Elvis, this time it si different.

What if Blackwater (Xe) brought in 50,000 battle-hardened mercs from the world over, on contract...

Remember the Iraqi Surrender? Really worth digging deep into, those were no cowards but battle hardened veterans of th eIran Iraq conflict.

You/we have no idea what we are up against then the pin does drop.

Patriotism/jingoism is what is counted on to in-flame crowds, who then jump off the closest cliff...in rage.

Command and control, overwhelming firepower, mind-blowing, tested crowd control technology, infiltration........

It's different this time. 

I'm not advocating being a coward and hiding, all I'm saying is think smarter.

To Orly's point above, bring on the McGyvers, not the range trained shooters.

ORI

 

Sun, 03/06/2011 - 13:12 | Link to Comment dark pools of soros
dark pools of soros's picture

those are defensive...  most bunker folks aren't leaving their bunker to join riots..  so the logistics change a bit...   if you are talking thousands of flying drone attacks, then that's the endgame

Sun, 03/06/2011 - 13:17 | Link to Comment Orly
Orly's picture

Tell it to John Conner.

Sun, 03/06/2011 - 17:01 | Link to Comment Abitdodgie
Abitdodgie's picture

Drones are only as good as the operator , take out the operator then there is no drone

Sun, 03/06/2011 - 13:18 | Link to Comment Things that go bump
Things that go bump's picture

ORI, that puts me in mind of the charge of the Light Bragade or the Polish cavalry charging a Panzer division - gallent but doomed and ultimately stupid.  We need to investigate the virtures of a disorganized resistance.  Gorilla warfare is much more productive.  

http://www.harrysnews.com/tgTheVirtuesofaDisorganizedResistance.htm

 

 

Sun, 03/06/2011 - 13:45 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Spot on ThingsTGB. Briliantly dis-organized.

David knew he was a dead shot and he knew goliath's weakness, that was fearless genius.

Very cool article, spot on with why it would not work in the US like it might in a more homogenous country.

ORI

 

Sun, 03/06/2011 - 14:32 | Link to Comment Coast Watcher
Coast Watcher's picture

Goto:

http://globalguerrillas.typepad.com/

to start learning about open source insurgency.

 

Sun, 03/06/2011 - 14:39 | Link to Comment Citxmech
Citxmech's picture

"We need to investigate the virtures of a disorganized resistance. Gorilla warfare is much more productive."

I think the big question - is what are resisting against?  The resisters want the system to continue as much as TPTB - to strike out at the power structure, we strike at ourselves.

The reason we're in this mess this deep is because TPTB are trying to keep the old system on life support, when it should be buried because it's starting to stink.

Either way - if people can't afford to get to work or eat - they will be rioting just to survive - not because of any grand political ideals.

Sun, 03/06/2011 - 17:05 | Link to Comment Abitdodgie
Abitdodgie's picture

 Taking out air bases is also very beneficial to knock out air support which will not be doing the rest of the country any good , after all how many fighter jets want to destroy there own base

Mon, 03/07/2011 - 03:21 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

There are many out there who will not allow their enlisted brothers (blood related) leave their homes in a conscious and/or breathing state when the time comes. Sad, but necessary.

Sun, 03/06/2011 - 11:33 | Link to Comment buzzsaw99
buzzsaw99's picture

Using the SPR to manipulate prices is pathetic. JPM is behind this move somehow I just noes it.

Sun, 03/06/2011 - 11:53 | Link to Comment Miles Kendig
Miles Kendig's picture

Using the SPR to manipulate prices is pathetic

And a lost cause under current circumstances.  A fine tell tale as to not only how clueless policy makers are, but of how scared they are that the blocks of WIC cheese being dropped by helicopter are losing their effectiveness.

Hey Mohamed El-Erian -- You were discussing the astuteness of established governance and its ability to maintain stability by acting proactively & preemptively?!  ROFLMAO

A third group of countries, including in the GCC, will likely avoid regime change. Governments have the willingness and ability to respond proactively and preemptively. They start with greater political and social legitimacy, as well as better means to help citizens deal with economic and social pressures. Indeed, some have already shown considerable skillfulness in understanding the dynamics in play and have reacted accordingly.

http://blogs.reuters.com/great-debate/2011/02/28/differentiated-change-i...

Sun, 03/06/2011 - 11:58 | Link to Comment buzzsaw99
buzzsaw99's picture

just -1 mb/d for two years = spr bye bye.

Sun, 03/06/2011 - 12:33 | Link to Comment Miles Kendig
Miles Kendig's picture

And that aint enough lube to keep Jamie "Blue Diamond" (money for nothing that ho aint free) Dimon pleased.

http://www.google.com/imgres?imgurl=http://www.everydayhealth.com/drugs/...

Let alone the greater populace

It's a CondomNation Buzz

Sun, 03/06/2011 - 17:49 | Link to Comment Freddie
Freddie's picture

You do know that Chase took over JP Morgan for the JP Morgan Chase.  You do know that Chase Manhattan is the Rockefeller family.

Sun, 03/06/2011 - 11:33 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

Eyeballing the Strategic Petroleum Reserve - http://cryptome.org/eyeball/spr/spr-eyeball.htm

Sun, 03/06/2011 - 12:13 | Link to Comment AN0NYM0US
AN0NYM0US's picture

and then there was former JPM exec Daley's response to the question on whether  some Wall Street Banksters shoud be behind bars

 

"that's not a question politicians should be involved in" (minute 16:20)

full interview:

http://www.msnbc.msn.com/id/3032608/#41935139

(This Daley guy is one very very scary dude)

Sun, 03/06/2011 - 11:33 | Link to Comment Triggernometry
Triggernometry's picture

Ruh-roh!

Sun, 03/06/2011 - 11:36 | Link to Comment papaswamp
papaswamp's picture

All is well rally on!

Sun, 03/06/2011 - 11:37 | Link to Comment EscapeKey
EscapeKey's picture

Total capacity 726m / Maximum drawdown: 4.4m = 165 days worth of (maximum) drawdown.

Modern day politics: attempting to fix long-term problems by applying an endless stream of short term fixes.
Sun, 03/06/2011 - 11:50 | Link to Comment Everyman
Everyman's picture

+1000 on the short term fixes for the long term problems.  Good Observation.

Sun, 03/06/2011 - 12:44 | Link to Comment Eternal Student
Eternal Student's picture

Yes. And the original article leaves out a very critical fact. Namely, the purpose of the oil reserve is to provide a reserve for the military, and not for civilians.

If we get anywhere close to drawing down a significant chunk of the reserve, it will stop. The Civilians will be screwed.

Sun, 03/06/2011 - 14:42 | Link to Comment SilverRhino
SilverRhino's picture

+1

Sun, 03/06/2011 - 11:38 | Link to Comment duo
duo's picture

Take action.  Get a motorcycle driver's license and buy a motor scooter (the 150cc ones get ~65 MPG in town).  If this is like 2008, the year's imports of scooters will be sold out within weeks.

Sun, 03/06/2011 - 12:01 | Link to Comment iDealMeat
iDealMeat's picture

Most M'ericans are too fat or stupid to pass the motorcycle half of the DMV exam..

Be funny to watch them try and ride a bike to their cubicle job an hour away by car..

If they even had a job..

 

Sun, 03/06/2011 - 12:41 | Link to Comment TimmyM
TimmyM's picture

My plan is to get a good pair of tennis shoes, an umbrella and some strong deodorant. What's the big deal?
If you are stupid enough to own an SUV, or live in the burbs, too fucking bad for you.

Sun, 03/06/2011 - 13:52 | Link to Comment Blankman
Blankman's picture

My plan is to live in the burbs, monopolize the the tennis shoe market and sell them to people like you at highly inflated prices.  It is still cheaper than a car, right? :)

Sun, 03/06/2011 - 14:26 | Link to Comment UGrev
UGrev's picture

When the SHTF, I'll say a prayer for you and your running shoes. Zombies can run fast when they're hungry and doors will only last "so long". Don't expect to come to the burbs empty handed or you'll end up just as bad off as if you were running from the zombies. Same goes for weaseling your way into the country-like areas. Farmers won't ask questions first if you get my point. 

Sun, 03/06/2011 - 23:24 | Link to Comment UninterestedObserver
UninterestedObserver's picture

Sure don't forget to buy a toe tag and fill it out for yourself, it will make it easier for the coroner when they scrape you off the pavement after some idiot talking or texting while trying to reach for his/her dropped cigarette while speeding hits you.

Sun, 03/06/2011 - 11:38 | Link to Comment bugs_
bugs_'s picture

The US is talking about tapping into its SPR while the Chinese are talking about starting to make one in the near future.  One thing we haven't reached yet is Peak Talk.

Sun, 03/06/2011 - 11:53 | Link to Comment EscapeKey
EscapeKey's picture

"The US Energy Policy Act of 2005 requires the SPR storage capacity to be raised to 1bn barrels. In the Jan 2007 State of the Union address, President Bush announced the intention to double of the SPR capacity to 1.5bn barrels by 2027", Morgan Downey, "Oil 101", pg 274.

Too bad it never moved beyond the intention.

Furthermore, 

Approximately two thirds of the SPR crude is sour. (pg 276)

One would hope this wouldn't cause refinery problems.

Crude oil in the SPR is contained in a number of salt caverns near the coast of Texas and Louisiana. (pg 274)

Sun, 03/06/2011 - 11:42 | Link to Comment Misean
Misean's picture

Next stop, price controls. They'll included them in the coming anti-snow legislation-full employment legislation.

Sun, 03/06/2011 - 11:53 | Link to Comment Long-John-Silver
Long-John-Silver's picture

and extend daylight saving time.......

Sun, 03/06/2011 - 12:07 | Link to Comment Misean
Misean's picture

Oh yeah. Goes without saying.

Sun, 03/06/2011 - 12:47 | Link to Comment Oh regional Indian
Oh regional Indian's picture

It's when you hear the "R" word that you know the game is finally up..

Rationing that is...

ORI

Sun, 03/06/2011 - 12:46 | Link to Comment Bastiat
Bastiat's picture

Well c'mon -- think how that could increase the output of solar collectors!

Sun, 03/06/2011 - 12:48 | Link to Comment Misean
Misean's picture

+1,000 Lumens!

Sun, 03/06/2011 - 13:02 | Link to Comment snowball777
snowball777's picture

LOL, nicely played.

Sun, 03/06/2011 - 13:14 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Solar panels use a couple of layers of Silver to collect and transfer the energy produced. I wonder if solar panels will become economically impracticable when Silver costs $500 an ounce?

Sun, 03/06/2011 - 14:23 | Link to Comment Hulk
Hulk's picture

They are not economically practical now...

Sun, 03/06/2011 - 11:42 | Link to Comment colonial
colonial's picture

Isn't SPRO supposed to be used when there is NO OIL, not for times when prices are inflated? 

What's going to happen when oil moves higher from here?  Many feel crude could move to pre credit crisis highs. 

I was under the impression that releasing oil from SPRO will not lower price. 

Sun, 03/06/2011 - 11:42 | Link to Comment theXman
theXman's picture

>> On Wednesday, U.S. Energy Secretary Steven Chu ruled out releasing oil from the reserve, 

Finally Steven Chu did something useful by doing nothing, although for the wrong reason (ignorantly hoping Saudi can ramp up oil production); nonetheless it is an improvement. 

I still want him to be fired ASAP since he has done absolutely nothing for the long-term health of America's energy future.

Sun, 03/06/2011 - 11:47 | Link to Comment Everybodys All ...
Everybodys All American's picture

More evidence this administration has no clue. If you want to have cheaper oil tomorrow end this f'ing mad man Bernanke's QE program.

Sun, 03/06/2011 - 11:54 | Link to Comment Everyman
Everyman's picture

If they TAP the SPR then they are admitting that we do have inflation that the FED RES is not correcting, but is making and it is an admission that the inflation could be runaway.  This is BAD NEWS that these idiots are even considering it. The SPR is for times of "Natinal Emergency" and rising prices or some political party's political life is not in that definition.  These politicians these days and their counterparts in the Civil Service are nothing of character I tell ya.

We are going to be "living in interesting times".  Wait and see, this is the first of many shoes to drop.

Sun, 03/06/2011 - 11:59 | Link to Comment Stuck on Zero
Stuck on Zero's picture

If the U.S. devoted as little as 1% of its GDP to energy and exercised a little common sense there would be no energy crisis and we wouldn't have to import anything.  Is that asking for too much?

Sun, 03/06/2011 - 12:09 | Link to Comment Misean
Misean's picture

That's the kind of central planning this economy is missing.

Sun, 03/06/2011 - 13:12 | Link to Comment FrankIvy
FrankIvy's picture

Stuck on Zero - clueless.

 

What does "devote to energy" mean?

Sun, 03/06/2011 - 12:00 | Link to Comment gwar5
gwar5's picture

Trying to talk the oil price down by saying they'll tap SPR is always the first step. It's all about the expectations and uncertainties.

What we should be doing is lifting the moratorium in the Gulf but the Obama regime, leading us into the 15th century, is in contempt of a Federal order to lift the ban at the very time we are in a  precarious situtation.

After that, drill baby, drill. We have gas, coal --- we got it all so let's f'ing do it. And get those nukes going while we're at it. There's no AGW and my daughter and granddaughters aren't going to be wearing burkas.

 

Sun, 03/06/2011 - 12:12 | Link to Comment Spastica Rex
Spastica Rex's picture

E-R-O-E-I = Natural Law

Sun, 03/06/2011 - 12:35 | Link to Comment Citxmech
Citxmech's picture

Yup.  And nature/God does not "favor" us.  Overshoot is a bitch.

Sun, 03/06/2011 - 13:05 | Link to Comment snowball777
snowball777's picture

Yes, I concur that the roof is on fire, but if we pee enough in this corner over here...

Sun, 03/06/2011 - 13:21 | Link to Comment Flakmeister
Flakmeister's picture

LOL....classic

Sun, 03/06/2011 - 15:57 | Link to Comment Miles Kendig
Miles Kendig's picture

+ inf

As the recycled refrain from wannabes that have no clue as to what it means NOT to be house broken continues

As the acolytes of the CondomNation seek anyones back door

http://www.youtube.com/watch?v=mNiiBrEHBWA

While hoping that pissing on the spark plug may be of some assistance

Sun, 03/06/2011 - 12:01 | Link to Comment pauldia
pauldia's picture

 You can make an offer for oil from the SPR right here.

http://www.spr.doe.gov/

 

Sun, 03/06/2011 - 12:04 | Link to Comment the grateful un...
the grateful unemployed's picture

in another decade oil just to fill global storage demand will amount to a 1MB a day. the bad part of this is the cost, above ground storage costs add several dollars to the cost of a BBL.

Recall under Bush the energy Sec was delegated the right to release oil from the SPR. Formmerly only POTUS could do it.

Bush used the SPR masterfully to bring gasoline prices down ahead of the 2006 midterm elections. In a post Katrina environment, much of enterprise owed the SPR oil, the SPR includes both Salt Dome and Enterprise Storage, for a total of 1.5B bbl. 

Oil that was in enterprise was shifted in account back to Salt Dome, government storage, but not physically transferred, then the oil was double counted for inventory purposes. the tankers arriving at NYC were told inventories were high, and prices were adjusted lower.

The traders knew it was bullshit because they started ignoring the inventory reports, but to prove they were right all you had to do was wait for crack spreads to widen. They did.

O(bush)ama needs to start working this angle if he wants gasoline prices to come down by election day, and if you have one brain cell left you know they must. In 2006 Goldman (Paulson, remember him) rejiggered their commodity index, and dropped gasoline from the weighting, that sent prices plummetting. 

O(bush)ama may not have that luxury, but he can force Enterprise storage (hedge funds and specs) to cough up the oil. From a political stand point it works this way.

You take office and gasoline is $3.50, lets say, then after two years it goes to $5.00, the public hates you, but in the two years left before the election you manage to get the price back down to $3.50. You are a great and wise leader. First you take something away from them, then you give it back, and you look like a hero.

 

meanwhile the poverty in the ME means selling more oil not less, but its really Chinas problem they need the oil to make stuff to sell us. we buy the stuff, and what it costs them to make it is of no consequence as long as they take our dollars, and peg themselves to it. The US has all the aces here, if o(BUSH)ama can play his cards correctly, and of course we elect these people because they are lying devious bastards, when dealing with those smelly foreigners.

since the US outsources manufacturing, the security of global oil reserves is really not a US priority.but key to solving all this will be cutting foreign aid to the former despotic ME states we have guarded. one can see some bipartisan agreement on that, although Obama is a statist politician. he will ultimately cave to the pressure. 

(the President for life moment in the Bush administration was the stealth attempt to get the nuke weapons away from Pakistan. For Obama it is $25 oil)

Sun, 03/06/2011 - 12:16 | Link to Comment Misean
Misean's picture

"and what it costs them to make it is of no consequence as long as they take our dollars, and peg themselves to it."

With labor costs rising in China and falling labor participation rates and stagnant wages in the U.S., I think it is of consequence. This ain't your father's stagflation.

Sun, 03/06/2011 - 12:24 | Link to Comment the grateful un...
the grateful unemployed's picture

the corporate supply chain is exceedingly flexible, if China wants to raise prices, maybe Mexico won't? there's always another poor country over that next hill, and with Wall Street and mulitnational system in full charge of the economy, they will run it that way.

Sun, 03/06/2011 - 12:09 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

As the US prepares to tap the strategic oil reserve, the UK government prepares to...

 

"Jails have been told that sex-change inmates must be allowed access to padded bras and make-up to cover stubble growth.

They should also be able to purchase "gender appropriate" clothing from a home shopping catalogue, according to a detailed set of instructions circulated by the Ministry of Justice."

http://www.belfasttelegraph.co.uk/news/local-national/uk/padded-bras-for-sexchange-inmates-15105166.html#ixzz1Fpv2BS4W

Sun, 03/06/2011 - 12:12 | Link to Comment ml8ml8
ml8ml8's picture

They're just jawboning.  Surely they would not be so stupid.  The SPR is absolutely for managing true supply disruptions and not prices.  They should impose gasoline rationing before they tap the SPR. 

If S.A. goes into a full blown revolution and suffers significant supply curtailment, THEN the SPR talk should begin.

China has an SPR.  It ain't big, but they've got one.  They took advantage of low prices in 2009 and 2010.

See, e.g., http://www.energytribune.com/articles.cfm/1026/China-Expands-SPR-Facilit...

Sun, 03/06/2011 - 12:18 | Link to Comment Misean
Misean's picture

See...price controls are an easy sell. The notion that prices actually ration is lost on people.

Sun, 03/06/2011 - 12:40 | Link to Comment Citxmech
Citxmech's picture

You are so right.  A constant high price will encourage proper behavior - it's this divergent occilation in prices that kills the type of investment and planning we need to mitigate the necessary contraction gracefully.

During the last price run, Matt Simmons kept recommending putting a floor under any price for just that reason.

Sun, 03/06/2011 - 23:29 | Link to Comment UninterestedObserver
UninterestedObserver's picture

LOL sure just like a constant high price for food encourages starving, I mean proper bahavior?

Sun, 03/06/2011 - 13:07 | Link to Comment FrankIvy
FrankIvy's picture

ML8 wrote: If S.A. goes into a full blown revolution and suffers significant supply curtailment, THEN the SPR talk should begin.

 

I disagree.  Attempting to use the SPR to manage price or to manage domestic shortages is a misuse of the resource.  SPR should be for military use only, IMO.  When you see more than a million Mexicans amass on the Rio Grande, TAP.  Before that, you're wasting it attempting to control a price you can't control or attempting to ameliorate shortages that will only continue.

Sun, 03/06/2011 - 12:14 | Link to Comment silvertrain
silvertrain's picture

 Desperate people do desperate things..

 But desperate actions most times show a weak hand..The script may be flipped right here on there intentions..

Sun, 03/06/2011 - 12:17 | Link to Comment Sudden Debt
Sudden Debt's picture

With the Chinese building those tanks, it will prove again that HAMSTERING will indeed do wonders to the price of oil.

+20% to fill it up!

Sun, 03/06/2011 - 12:21 | Link to Comment silvertrain
silvertrain's picture

 The Ironic thing is that a pre 65 Silver Quarter will probably still buy a gallon of Gas even after that 20% rise...

Sun, 03/06/2011 - 12:19 | Link to Comment MsCreant
MsCreant's picture

SPR = Fort Knox 

Sun, 03/06/2011 - 12:28 | Link to Comment AN0NYM0US
AN0NYM0US's picture

are you saying the SPR is actually filled with Tungsten?

Sun, 03/06/2011 - 12:32 | Link to Comment Orly
Orly's picture

Canola.

Sun, 03/06/2011 - 12:25 | Link to Comment Troy Ounce
Troy Ounce's picture

 

Just to make sure. Nobody saw this coming, right?

Sun, 03/06/2011 - 12:46 | Link to Comment lizzy36
lizzy36's picture

Please the current group of geniuses couldn't see a shit coming, even though it happens everyday.

The beauty of branding something as "one in 100 years" or "unforeseen", no cohesive policy response is required.

Of course we have had "once in a 100 year financial crisis" 3x in past 12 years. And had $4 a gallon gas, (and the consequences thereof) a mere 4 years ago.

Chairsatan, and his side kick Tiny Tim have worked overtime in the propaganda departement (as we come up on the 2 year anniversary of "green shoots") over the last 2 years to ensure that NOBODY suffers PTSD from 2008.  FUCKERS.

Sun, 03/06/2011 - 13:13 | Link to Comment Miles Kendig
Miles Kendig's picture

Send those lurkin' midget tranny pron watchers to school Drill Sergeant Lizzy!!

http://www.youtube.com/watch?v=08ahnM5iRjQ

And that's why we say they raise 'em dumb and mentally impacted over there in the Treaserve complex -- in more ways than one

Sun, 03/06/2011 - 12:28 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Ditch your SUV. It's so passe. GM is going to sell them to the Chinese.

http://www.youtube.com/watch?v=GugsCdLHm-Q

 

Sun, 03/06/2011 - 12:33 | Link to Comment AN0NYM0US
AN0NYM0US's picture

For the first time, the Chicago Police said Friday they know who hit David Koschman and knocked him to the ground in a drunken confrontation in the Rush Street area, leading to his death from a brain injury 11 days later — but they’re not telling.

They said they are closing Koschman’s 2004 homicide case without asking the Cook County state’s attorney’s office to charge anyone because they concluded the punch was thrown in self-defense.

Police reports made public Friday black out the name of the man who detectives concluded threw the lone punch at Koschman. But the descriptions they provided and accounts given by witnesses and others to the Chicago Sun-Times make clear it was Richard J. “R.J.” Vanecko, a nephew of Mayor Daley and White House Chief of Staff Bill Daley.

Vanecko, 36, has refused to speak to the police on the advice of his criminal-defense lawyers, including Terence Gillespie, according to the police.

http://www.suntimes.com/4139474-417/homicide-case-involving-daley-nephew...

Sun, 03/06/2011 - 12:34 | Link to Comment mynhair
mynhair's picture

Well, at least no SPR oil will go to NYC; Bumberg won't allow it.

Too high a salt content.

Sun, 03/06/2011 - 12:47 | Link to Comment Orly
Orly's picture

Very clever, mynhair.

:)

Sun, 03/06/2011 - 12:40 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

You know what else didn't make Meet The Press?

THAT THIS ISN'T SUPPOSED TO BE NECESSARY, WHAT WITH THE SAUDIS HAVING AN EXTRA 4 MBPD OF EXCESS PUMPING CAPACITY.

Make no mistake about this.  If they have truly been outted as having damn near no additional pumping capacity, forget the markets.  Forget gold.  Forget the Fed.  

It's Game Over.  Wars to counter US starvation are coming soon.

Sun, 03/06/2011 - 12:42 | Link to Comment Citxmech
Citxmech's picture

PRECISELY.

For a preview of coming attractions check out Michael Klare's "Resource Wars."  Front row seats are available for everybody - whether you want them or not.

Sun, 03/06/2011 - 13:15 | Link to Comment snowball777
snowball777's picture

Good time to be in the balcony...better lines of sight.

Sun, 03/06/2011 - 12:44 | Link to Comment RobotTrader
RobotTrader's picture

Let the jawboning begin.

It really doesn't matter how much is in the SPR, or how fast they can pull it out.

The only thing that matters is how the market reacts to this news, bogus or not.

With crude spec longs at or near a record, a huge break is overdue.

Somebody always knows something.

I remember watching the intraday charts of retailers like WFMI, SBUX, COH, etc. during Friday's smackdown, and none of these stocks were selling off.

PigMen obviously got the script before anyone else did, and they were frontrunning the announcement.

Somebody big bought XRT right before the bell on Friday.

Sun, 03/06/2011 - 12:55 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Somebody big bought XRT right before the bell on Friday.

 

Thanks for the info

PS • Look for D'Rose & Company to slap around the Miami Heat today. They have no bench and Bosh is soft as a pillow, watch him crying for fouls all day long.

 

 

Sun, 03/06/2011 - 12:55 | Link to Comment Orly
Orly's picture

Wow!  Look at that volume spike!

I sure wish I were as good a trader as that; to have such foresight and ability to implement my strategery.

Makes me jealous.

/:

Sun, 03/06/2011 - 13:02 | Link to Comment Careless Whisper
Careless Whisper's picture

bullish on oil? bearish on sp500? all it takes is one click thanks to some m.i.t. genius who created the FOL etf. it's bullish oil 2x PLUS bearish sp500 2x. not very liquid but dayum.

 

Sun, 03/06/2011 - 13:23 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

When I buy something, I first do a ton of research on the business or product and lay out a timeline.

Like Tata in India, it's was already down 33% because of the inflation rate and some bad news on the Nano. The company is a powerhouse in India and they purchased Jaguar & Range Rover during crisis. I'll keep this for a long, long time. 

I do not trade yet ( not enough cash ). So almost everything for me is buy and hold.

Sun, 03/06/2011 - 13:23 | Link to Comment Flakmeister
Flakmeister's picture

SS, did you find my response in the other oil thread?

Sun, 03/06/2011 - 13:44 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Yes, thanks.

 

It's a crazy subject from my perspective. Like the low refinery count in the USA, this helps push up pricing in gas IMO, in Arizona they can't use the same gas as Cali because its different in some ways, tons of red tape.. And the fact its traded any bad news draws in the big money going long and the fact information • news goes global in seconds, crazy shit.

 

Did you build your pile of cash from nothing ? Or was your family into trading how did you get the ball rolling ? As the middle east shit started you could have went in heavy on oil and made a killing the last few weeks ....

 

 

Sun, 03/06/2011 - 13:49 | Link to Comment Flakmeister
Flakmeister's picture

Self taught.... It was easy to apply my training in physics to finance and investing. It ain't rocket science....

I don't try to make a killing, I only try to keep what I and my clients have (from a buying power perspective) Beware nominal vs. real. And recall, I do not day trade.

I did save every silver coin from my youth....

Google US refining capacity or go to the DOE/IEA site.. Cal relies on west coast oil... no significant pipeline across the Rockies...

Sun, 03/06/2011 - 14:00 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

How long have you been investing.. ? How much did you start with or did it happen slowly over 10-15 years.

 

Has it always been in energy and commodities ? 

 

Also, I really wish your help • tips could be purchased from my td ameritrade account. I'm not a big dog with a global trading account :-) I have studied finance ect for 10 years but just started buying stocks over the last 1-2 years. I would read about this credit issue or that bubble over that ten year span but I never took the step and purchased gold like the authors prescribed.

Sun, 03/06/2011 - 14:08 | Link to Comment Flakmeister
Flakmeister's picture

Started in ~1990... got to have some seed corn to start. I remember levering a LOC to buy foriegn currency bonds as the $CAD was crapping out...

Walked away from grad school with $60K, no debt. Took a 6 year hiatus when I lived overseas as there was no good way to invest in Switzerland for the amount of capital I had...

Only been *active* since 05, when I really clued in about oil. Before that it was "classic investing" based on macro-economics, e.g. was in Bonds for the dot-com fiasco. I stuck with Mutual funds until I realized that they did not meet my needs.

Sun, 03/06/2011 - 12:55 | Link to Comment Misean
Misean's picture

"Somebody always knows something."

Wouldn't surprise me.

Sun, 03/06/2011 - 13:23 | Link to Comment dehdhed
dehdhed's picture

if you were to look at the daily/weekly charts it looks to me like a breakout that's already retested and targeting $130, which would probably mean the old highs get challenged.

if oil moves lower on this news, it seems almost a no-brainer to buy the dip.  for a guy as braindehd as me, those are the kind of trades i look for.

Sun, 03/06/2011 - 12:57 | Link to Comment dehdhed
dehdhed's picture

i listened to the interview and it seemed pretty obvious to me that he side-stepped the issue of tapping the strategic reserves.   he said it's only been done a few times and with the unrest in the middle east tapping into the reserves  would have to be weighed against other factors but that all options were on the table.

he also said the decision to use of the reserves has more to do with other things besides price.

you have to really read between the lines with what he said, but to me he meant if anything they'll try to increase the reserves.  which, according to this article, seems to be what other countries plan to do too.

Sun, 03/06/2011 - 12:46 | Link to Comment Lone Mad Minute...
Lone Mad Minute Medic's picture

Fish is the answer, Fish meat and fish oil. Fish energy!

Sun, 03/06/2011 - 14:14 | Link to Comment MsCreant
MsCreant's picture

There are scientists who project that fish will be gone from the ocean, at current rates of depletion, by 2048. And that was before the Gulf Oil Spill.

Sun, 03/06/2011 - 15:03 | Link to Comment Miss Expectations
Miss Expectations's picture

Breakfast special: Tilapia

Lunch special: Tilapia

Dinner special: Tilapia

Sun, 03/06/2011 - 12:47 | Link to Comment King of Spain
King of Spain's picture

Everyone on this board sounding like pre-08 collapse.  Then, as now, people calling for $200-300 oil.  Tells me a collapse around the corner, engineered or not. We have record Cushing inventories of oil and record gasoline inventories.  While that would mean nothing if Middle east falls to radicals, it does tell us the economy is weak and likely getting weaker. Obama likely just setting up energy prices so he can drop them in 2012 and appease the sheep.  Winning?

Sun, 03/06/2011 - 13:00 | Link to Comment FrankIvy
FrankIvy's picture

Your understanding of WTI needs to be filled more.  Sure the economy is weak and getting weaker.  But oil IS the economy.  It's not optional.  So in a failing economy with a depleting resource, you get the double whammy of shrinking GDP and rising oil price.  If you don't think price will continue to rise, consider Asia.

Sun, 03/06/2011 - 13:01 | Link to Comment Citxmech
Citxmech's picture

Well, the economy fell apart on the run-up to $150/bbl oil - but money was worth more way back then.  What can we endure today?  Because of how tenuous things are - I think we'll begin to see big problems in a few months at this level as gas/diesel prices trickle into food prices.  Next leg down is going to be a PR disaster - TPTB are going to need a scapegoat...

Sun, 03/06/2011 - 13:28 | Link to Comment dehdhed
dehdhed's picture

if everyone continues to believe higher oil caused the crash, then i guess the bankers get to stay out of jail a while longer.

Sun, 03/06/2011 - 14:54 | Link to Comment Citxmech
Citxmech's picture

Obviously, it's more complicated than that - the entire system [debt-based money, etc.] is predicated on cheap, sustainable growth, which is no longer sustainable, or cheap.  The POO is a very public harbinger of the end of our boom cycle, and I have yet to see a culture that managed a contraction gracefully.

Sun, 03/06/2011 - 13:41 | Link to Comment Things that go bump
Things that go bump's picture

I thought it was the Democrats' turn to be the scapegoat.

Sun, 03/06/2011 - 23:35 | Link to Comment UninterestedObserver
UninterestedObserver's picture

The amount of hot money this time around is staggering compared to 08 - and now all of the banks are insolvent not just 1 or 2 of the majors

Sun, 03/06/2011 - 12:55 | Link to Comment Bastiat
Bastiat's picture

All the repo'd negative equity SUVs and pickups will not help bank balance sheets . . . and those GM dealer lots . . .

Sun, 03/06/2011 - 12:55 | Link to Comment FrankIvy
FrankIvy's picture

"Stategic" Reserve.  So we're applying the Saudi strategy?  Which is to tap resources to mollify the awakening sheeple to kick the can a little further.  Is that right?  Silly me thought that it might be for military appliactions, and so on.

Sun, 03/06/2011 - 12:57 | Link to Comment trendybull459
trendybull459's picture

smells 2008,when Obama crashed 147$ oil price by using strategic reserve,prepare ,the commercials are short oil,the speculators are all hystory 2008 even high,it will be again dirty play regulated market.Remember,China was not bully on oil when it was 35$,every one then sucked,so,will be this time again

Sun, 03/06/2011 - 13:08 | Link to Comment President Palin
President Palin's picture

smells 2008,when Obama crashed 147$ oil price by using strategic reserve,prepare ,the commercials are short oil,the speculators are all hystory 2008 even high,it will be again dirty play regulated market.Remember,China was not bully on oil when it was 35$,every one then sucked,so,will be this time again

 

Umm... Obama wasn't President in 2008, it was Dubya.  Get your facts straight. 

Sun, 03/06/2011 - 13:21 | Link to Comment Orly
Orly's picture

Hi.  I haven't seen your name before but...

your nick makes me queasy and uncomfortable...just so you know.

/:

Sun, 03/06/2011 - 13:23 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Confusing Bush with Obama is a  easy thing to do. One was white and the other is half white. Other than that, no discernible difference can be detected.

Sun, 03/06/2011 - 13:30 | Link to Comment Orly
Orly's picture

True.  It is my understanding that da Zbig and Henry call them both, "Buddy."

Sun, 03/06/2011 - 13:10 | Link to Comment Glasgow Gary
Glasgow Gary's picture

Tapping the SPR was already in the market. It was discussed among Democrats speaking to the White House 7 days ago. At best, and SPR release will do nothing but pull down WTIC as it will create more supply at Cushing. It will do nothing for Brent, and the world sill simply ship less oil to the US. Sure, it might take a few traders out for 24 hours as WTIC pulls back to 100. So what.

Sun, 03/06/2011 - 13:20 | Link to Comment snowball777
snowball777's picture

It's all about "managing perceptions"...and will be about as effective as donning a hat after being caught by your wife while banging a hooker.

 

Sun, 03/06/2011 - 14:56 | Link to Comment Citxmech
Citxmech's picture

That reminds me of that Richard Pryor routine...

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