It's Official - US, UK To Release Strategic Oil Stocks

Tyler Durden's picture




 

And so the lunacy hits a crescendo:

  • U.S., U.K. AGREE TO EMERGENCY OIL STOCKS RELEASE, REUTERS SAYS

Translation:

Hi China, this is Barrack, please buy our oil at firesale prices as you in turn build your strategic reserves. I have a reelection to win. Oh and when Iran attacks one of our 3 aircraft carriers parked next to Tehran in a false flag attack, at least oil will soar from a lower price point.

 

Love, B.H.O.

In other news, Barry's reelection is now a matter of national emergency.

Here is a chart of US SPR vs Oil, courtesy of Reuters.

And, as a reminder:

As US Contemplates Releasing Crude From The Strategic Reserve, China Resumes Building Emergency Inventory

A tale of two civilizations, one in ascent and one in decline, can probably be best summarized by how they ration for the future in that most important of commodities - energy, in this case vis-a-vis the respective treatment of the strategic oil reserves of China and the US. Because while all the rage in D.C. political gab in recent weeks has been whether the US will allow a release of oil from the SPR, just to appease those Obama voters who actually have a job and have to take a car to get to it, things over at America's nemesis in civilizational conflict are diametrically opposite. As Bloomberg reports, China has "started filling its emergency petroleum reserve at Lanzhou in the nation’s northwest, according to an official at the nation’s largest crude producer." Unlike the US, where everything is now a function of market liquidity, evil speculators, and political ambitions (rest in peace supply and demand), China is completely ignoring all the day to day mundane drivel, and is doing what is right - which is to make sure it is prepared for an "eventuality" in the crude supply. Said eventuality is 100% guaranteed to happen if the Panetta-McCain is given a green light to allow the liberation of Iranian crude to finally proceed following years of foreplay.

From Bloomberg:

China, the world’s second-largest crude consumer, finished filling the first phase of its emergency stockpile with 103.2 million barrels of oil in 2009. The second phase, comprising eight locations with a storage capacity of 168.6 million barrels, is scheduled to be completed by early 2013. The Lanzhou depot has a capacity of 18.9 million barrels.

 

The nation imports 10 million metric tons of crude a year, or 200,000 barrels a day, from Central Asia via a pipeline from Kazakhstan that started in 2006. The annual capacity of the cross-border oil line, China’s first, will rise to 20 million tons by 2013, according to CNPC.

As a reminder, here is how Chinese crude imports stood most recently as of February.

A new all time record.

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Thu, 03/15/2012 - 11:43 | 2257941 xtop23
xtop23's picture

Sheer....Fucking.... Lunacy.

Thu, 03/15/2012 - 11:47 | 2257976 SHEEPFUKKER
SHEEPFUKKER's picture

How will this "emergency release" affect Chevy Volt sales?

Thu, 03/15/2012 - 11:49 | 2257997 knukles
knukles's picture

War confirmation.
The US and GB agree.....
What teo miscreants together...

Thu, 03/15/2012 - 12:01 | 2258080 nope-1004
nope-1004's picture

This gov't operates in crisis management mode only.  No long term perspective at all.

The wheels are falling off, and all they can do is stoke oil supply and interest rates.  Horrible joke.

 

Thu, 03/15/2012 - 12:01 | 2258102 Manthong
Manthong's picture

We are exporting gasoline and these psychopaths are opening the SPR?

If that does not prove that they are desperate, evil or both, nothing will.

Thu, 03/15/2012 - 13:55 | 2258645 trav7777
trav7777's picture

wtf difference does it make if we are exporting gasoline?

War over oil is INEVITABLE given export land model

Thu, 03/15/2012 - 12:06 | 2258132 WonderDawg
WonderDawg's picture

Disaster Economics means never let a good crisis go to waste. And if you need to create a crisis to implement shocking measures of control, so be it.

Thu, 03/15/2012 - 12:09 | 2258159 WestVillageIdiot
WestVillageIdiot's picture

But what if the world ends tomorrow?  Then all of their short-term thinking would have been justified.  See, they have a plan.  The apocalypse is all they need to prove their policies right.

Thu, 03/15/2012 - 12:01 | 2258099 azzhatter
azzhatter's picture

I watched yesterday with bewilderment at how far the once might have fallen. Hard to imagine two once great nations being led by the likes Obammy and Cameron. Especially after dealing with bush and Gordo and Blair. Hard to imagine more inept leadership. And no one to blame but the people who vote for these glorified hamsters (apologies to hamsters worldwide)

Thu, 03/15/2012 - 12:01 | 2258100 azzhatter
azzhatter's picture

I watched yesterday with bewilderment at how far the once might have fallen. Hard to imagine two once great nations being led by the likes Obammy and Cameron. Especially after dealing with bush and Gordo and Blair. Hard to imagine more inept leadership. And no one to blame but the people who vote for these glorified hamsters (apologies to hamsters worldwide)

Thu, 03/15/2012 - 12:05 | 2258124 Gene8696
Gene8696's picture

Agree.. War or something coming. Get the price lower before actions start. Holding my WTI longs and will pickup more on this dip.

Thu, 03/15/2012 - 11:51 | 2258013 mayhem_korner
mayhem_korner's picture

How will this "emergency release" affect Chevy Volt sales?

 

I hear they're going to explode.

(it's bad, I know)

Thu, 03/15/2012 - 11:50 | 2258014 SheepDog-One
SheepDog-One's picture

Yea really...I thought the mantra was high oil prices are good news, and everyone needs to buy a Gubment Volt.

Thu, 03/15/2012 - 12:05 | 2258123 Fedaykinx
Fedaykinx's picture

i'm waiting for the tax credit to hit $25,000 THEN i'll think about it.  a little.

Thu, 03/15/2012 - 14:15 | 2258708 RmcAZ
RmcAZ's picture

Then they will just raise the price by $25,000.

Thu, 03/15/2012 - 11:47 | 2257977 oogs66
oogs66's picture

I give up. I'm not a masochist but does this country ever attempt to do anything other than alleviate short term pain?

Thu, 03/15/2012 - 11:52 | 2258029 WestVillageIdiot
WestVillageIdiot's picture

I am seeing oil currently down one penny on the day.  Do we remember what a penny is?  It is one of those things that people won't even bend down to pickup anymore.  That should really spell relief for the masses.

Today's inflation number was great.  Only gas was up.  And we all know gas doesn't have much impact on a hyper-consumer driven economy. 

Thu, 03/15/2012 - 12:09 | 2258153 connda
connda's picture

Hummmm -- No!

Thu, 03/15/2012 - 12:59 | 2258434 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

 

 

No, they just supplement it with long term pain!

Thu, 03/15/2012 - 13:56 | 2258651 trav7777
trav7777's picture

everything is an election cycle away.  did clitton do anything to alleviate the massive bubbles in housing and stocks?  Nope...he rode it to massive popularity and let the next guy deal with the fallout.  Busch did the same thing...Raygun too

Thu, 03/15/2012 - 14:51 | 2258847 a growing concern
a growing concern's picture

I see what you did there...

Thu, 03/15/2012 - 11:48 | 2257984 TruthInSunshine
TruthInSunshine's picture

<--Obama desperate over Bernanke-pumped oil/everything inflation in election year

<--Obama opens SPR spigot to partly offset further gas price ramp from coming Iran 'action'

Thu, 03/15/2012 - 11:50 | 2258011 WestVillageIdiot
WestVillageIdiot's picture

About an hour ago I heard a clip of the Blowhard in Chief reading a toast to Cameron and the Queen.  It was painful.  The guy has no charisma at all.  He sounds like a sixth grader reading a science textbook.  And this is the guy that all of the braindead, and racially motivated sheep, drooled over in 2008.  That still frightens me.

 

His performance shows that if BHO ever had an original idea it would die of loneliness. 

Thu, 03/15/2012 - 11:51 | 2258019 SheepDog-One
SheepDog-One's picture

War oil. Dont worry, the price of gas wont go down for us peasants, it will keep climbing.

Thu, 03/15/2012 - 12:05 | 2258131 EscapeKey
EscapeKey's picture

Ah, it won't matter. Since you soon won't have a job, its price will have even less importance to you.

That frees up more money to buy other stuff, and that's bullish.

Thu, 03/15/2012 - 11:50 | 2258003 Sudden Debt
Sudden Debt's picture

EMERGENCY ROBINSONS! EMERGENCY!!

SOMEBODY SMACK THAT STUPID ROBOT TO PIECES!! LOOK AT WHAT'S HE'S DOING TO THE PLACEèèè

Thu, 03/15/2012 - 20:43 | 2260112 StychoKiller
Thu, 03/15/2012 - 11:51 | 2258020 battle axe
battle axe's picture

All coming together nicely, push gas prices down with strategic release from GB and then USA and then light up Iran so that the people of the west don't scream bloody murder about spiking gas prices soon after. Sounds like a plot from a James Bond Movie, problem is, it is true. 

Thu, 03/15/2012 - 12:09 | 2258160 WonderDawg
WonderDawg's picture

And the other problem is, releasing from the SPR will have a minimal impact on prices. Barely a ripple in the long run.

Thu, 03/15/2012 - 14:49 | 2258839 Calmyourself
Calmyourself's picture

BA, seriously.. Bamster has not planned this beyond the end of his nose, pure electioneering / Axelrod garbage..

Thu, 03/15/2012 - 12:44 | 2258364 It was not me
It was not me's picture

So anybody who did not follow Armada Markets recko to sell short crude oil calls has turned out to be an idiot. 

Thu, 03/15/2012 - 16:31 | 2259255 Pete15
Pete15's picture

This will push oil down then maybe goldmans QE call by April isnt that hard to believe. Any thoughts my niggas??

Thu, 03/15/2012 - 11:43 | 2257943 Contura
Contura's picture

Halleluja

Thu, 03/15/2012 - 11:43 | 2257944 HelluvaEngineer
HelluvaEngineer's picture

Any fucking idea what the word "emergency" means?

Thu, 03/15/2012 - 11:44 | 2257953 mayhem_korner
mayhem_korner's picture

 

 

Yes, it means that November 6th is getting close.

Thu, 03/15/2012 - 11:52 | 2258026 SheepDog-One
SheepDog-One's picture

But I thought all they needed to do was pump stocks and all would be well?

Thu, 03/15/2012 - 12:02 | 2258059 mayhem_korner
mayhem_korner's picture

 

 

The algos have prolly been directed to rehypothecate the WTI sell-off to BAC and the DOW.  Problem solved.

Thu, 03/15/2012 - 12:00 | 2258093 alien-IQ
alien-IQ's picture

Perhaps this will help clarify what "emergency" means in this situation:

Under a 1975 Memorandum of Understanding (MOU) the USA guaranteed all Israel's oil needs in the event of a crisis. This Memorandum of Understanding is quietly renewed every five years. It commits U.S. taxpayers to maintain a strategic U.S. reserve for Israel, equivalent to $3 billion in 2002 dollars. Special legislation was enacted to exempt Israel from restrictions on oil exports from the USA. Moreover, the U.S. government agreed to divert oil from the USA, even if this causes domestic shortages. The U.S. government also guaranteed delivery of oil in U.S. tankers if commercial shippers become unable or unwilling to carry oil from the USA to Israel.

Thu, 03/15/2012 - 13:59 | 2258660 trav7777
trav7777's picture

shall we tick down the list of important congressional positions and who is in them?  or will Clitton's entire senior cabinet be enough?  How about banks or media?

I mean how fuckin obvious does it need to be for people to remove their mental shackles and shut off current to their third rail?

Thu, 03/15/2012 - 14:51 | 2258845 Calmyourself
Calmyourself's picture

LINKS....

Thu, 03/15/2012 - 11:47 | 2257946 mayhem_korner
mayhem_korner's picture

 

 

Eyedropper in the swimming pool. 

How they gonna do the accounting for the $160/bbl replacement cost - LIFO?

Thu, 03/15/2012 - 11:50 | 2258008 knukles
knukles's picture

As in Tax-Payer?

Thu, 03/15/2012 - 12:15 | 2258195 Cruel Aid
Cruel Aid's picture

That is funny. There is no budget or accounting, only statistics.

Thu, 03/15/2012 - 11:44 | 2257955 FinHits
FinHits's picture

Oiling the economy's wheels is a slick job.

Thu, 03/15/2012 - 11:45 | 2257960 scatterbrains
scatterbrains's picture

how does releasing some sludge from a cave equal plenty more refined fuel at the pump?

Thu, 03/15/2012 - 11:45 | 2257961 t_kAyk
t_kAyk's picture

My head hurts.  Shots anyone? 

Thu, 03/15/2012 - 12:25 | 2258251 Pchelar
Pchelar's picture

Scrw the shots, it's time to start drinking Old Crow in one... long... pull...

http://www.youtube.com/watch?v=3mx8eBZb9II

Thu, 03/15/2012 - 11:46 | 2257963 Son of Loki
Son of Loki's picture

... releasing it again into the stores of JPM I bet...las ttime barry handed JPM half the entire release (92 million barrles) at $92 a barrel.

Sweet deal for JPM but sucked for consumers....

Thu, 03/15/2012 - 12:07 | 2258141 EscapeKey
EscapeKey's picture

Are there other kinds of government sponsored deals?

Thu, 03/15/2012 - 11:46 | 2257967 alien-IQ
alien-IQ's picture

certainly somebody on CNBC will interpret this to be bullish for AAPL... after all...isn't everything?

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