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Margin Hiker-In-Chief Awakes: White House "Dusting Off" Plans For Strategic Petroleum Reserve Release

Tyler Durden's picture




 

It must be election season because moment ago Reuters just reported that the White House is "dusting off old plans on a potential SPR release as prices rise" according to a source with knowledge of the situation. This too, just like the earlier Corzine news, should not be a surprise. Obama made it expressly clear that with the election fast approaching, he would either force the CME to hike margins, which is also coming, or would proceed with the far dumber step of an SPR release, just so China can full up its own strategic release faster and at a lower cost. The spun version, of course, has to do with Iran, and the fear of "undermining" Iran sanction success. The same sanctions which the US granted key Iran client China a compliance waiver...

From Reuters:

The White House is "dusting off old plans" for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions, a source with knowledge of the situation said on Thursday.

 

U.S. officials will monitor market conditions over the coming weeks, watching whether gasoline prices fall after the Sept. 3 Labor Day holiday, as they historically do, the source said.

 

It was too early to say how big a drawdown would be from the U.S. Strategic Petroleum Reserve and, potentially, other international reserves if a decision to proceed was taken, the source said.

 

Oil prices have surged in recent weeks, with Brent crude prices closing in on $120 a barrel, up sharply from around $90 a barrel in July. The United States and other Group of Eight countries studied a potential oil release in the spring but shelved the plans when prices dropped.

 

With prices high again, U.S. officials were now collecting information from the market about potential needs and studying futures, production numbers and data on Iranian oil exports.

 

"The driving force in this is both impact on the economy and impact on the Iran sanctions policy," the source said, noting that Washington did not want rising oil prices to create a windfall for Iran while oil embargo and international sanctions were having an effective impact.

 

The United States has yet not held talks with international partners about a coordinated move. The source noted that Britain, France, Germany and other partner nations in the Paris-based International Energy Agency were receptive to a potential release a few months ago when conditions were similar.

 

Those countries were concerned about the impact of high oil prices on the global economy and Iran then, and those concerns "remain equally relevant today."

Oil for now is not buying it for the simple reason that with cross-asset correlations at one, a Strategic Petroluem Reserve release would also means an interim S&P 500 top.

 

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Thu, 08/16/2012 - 14:35 | 2711520 Hondo
Hondo's picture

Truly laughable.....the WH should be held in contempt  

Thu, 08/16/2012 - 14:52 | 2711596 malikai
malikai's picture

Here's crude as of this afternoon:

http://www.quantsig.net/img/com_brent.png

http://www.quantsig.net/img/com_wti.png

I think I'm going put shopping..

Thu, 08/16/2012 - 15:18 | 2711756 notbot
notbot's picture

This guy has no conscience.  I've never seen such blatant politically opportunistic moves, not even disguised in any way.  It's like he's openly mocking the media..."no matter what I do, you won't run a negative story on me"  Just wow.

Thu, 08/16/2012 - 15:34 | 2711835 Spastica Rex
Spastica Rex's picture

Not even Fox?

Thu, 08/16/2012 - 15:54 | 2711937 notbot
notbot's picture

Goes without saying Spastica.  Every other MSM except Fox.  ABC, NBC, CBS, NYT, WaPo, CNN, LA Times, etc,...you know, all the ones that claim no bias.  Fox/MSNBC are at least open about their bias.

Thu, 08/16/2012 - 15:39 | 2711863 malikai
malikai's picture

Wait til you see the next guy in "charge"..

Thu, 08/16/2012 - 17:47 | 2712355 lolmao500
lolmao500's picture

In 2017?? The US won't exist anymore...

Thu, 08/16/2012 - 15:26 | 2711804 XitSam
XitSam's picture

I hold the White House in contempt every waking hour.

Thu, 08/16/2012 - 15:51 | 2711919 Nobody For President
Nobody For President's picture

And Congress. Don't forget Congress!

Thu, 08/16/2012 - 15:50 | 2711914 EINSILVERGUY
EINSILVERGUY's picture

They are, just not by the Courts

Thu, 08/16/2012 - 16:20 | 2712043 HungrySeagull
HungrySeagull's picture

Save that damn SOR.

I'll rather eat the 10 dollar gas knowing the Military has something to run on while in combat.

Thu, 08/16/2012 - 17:52 | 2712377 lolmao500
lolmao500's picture

Even if they wage war on the American people?

Thu, 08/16/2012 - 14:36 | 2711526 Squid Vicious
Squid Vicious's picture

because it worked so well last time, for about 48 hours?

Thu, 08/16/2012 - 15:14 | 2711752 CrashisOptimistic
CrashisOptimistic's picture

This is the danger of seeing an event and thinking it is consequence.

Oil was up sharply last year, he did an SPR release, economic activity was smashed as a result of the very high oil price, oil consumption was similarly smashed and the price fell.

Of course the Administration had to interpret the price fall as a result of their puny SPR release.

Brent is the price of oil.  It's getting scarcer every day.  Iran is pumping about 800K bpd less than pre sanctions.  They are still doing 2.6 million bpd and at Brent prices, that's a pretty penny.

But none of it matters.  He has to be seen doing something as the election approaches.

Thu, 08/16/2012 - 14:36 | 2711527 The trend is yo...
The trend is your friend's picture

Why is oil still up?   no one believes his bullshit

Thu, 08/16/2012 - 18:03 | 2712402 lolmao500
lolmao500's picture

That and Israel's warmongering.

If only supply-demand were at work here, oil would be at 50$ a barel or less.

Thu, 08/16/2012 - 18:29 | 2712474 Flakmeister
Flakmeister's picture

My fuck that was funny....

Maybe you should take your schtick to the road...

Thu, 08/16/2012 - 14:37 | 2711531 Greenhead
Greenhead's picture

They already are contemptable

Thu, 08/16/2012 - 14:37 | 2711532 radicall
radicall's picture

YEah.. better than QE. Let's Print some oil. Does this mean Israel is going to attack Iran in the next 48 hours?

Thu, 08/16/2012 - 14:41 | 2711556 Winston Churchill
Winston Churchill's picture

My thought also.

Will do nothing for price unless theres a severe supply disruption.

In that case,it will keep it below $200 per barrel.

Thu, 08/16/2012 - 15:35 | 2711841 salvadordaly
salvadordaly's picture

Wouldn't a smart move be to reserve the reserves in case of war between Isreal and Iran?

Thu, 08/16/2012 - 14:38 | 2711537 ekm
ekm's picture

It was about time.

The only thing that matters for the economy is the crude oil price. Nothing else.

Crude oil higher, economy shit.

Crude oil lower, economy has a chance.

The correct price would be brent at $60 and WTI at $50. That would really do something for the simple Joe.

The problem is that the intermediaries are storing the crude to keep the price high, same as for stocks.

Thu, 08/16/2012 - 14:44 | 2711565 Flakmeister
Flakmeister's picture

C'mon....

Do you really think those prices will be seen short of Lehman/AIG redux???

Marginal cost of a new Bakken barrel is about 70-80 per barrel....

Thu, 08/16/2012 - 14:49 | 2711601 ekm
ekm's picture

I disagree on the marginal cost. If oil prices go down and there is deflation, their input costs would go down also.

I do not believe that the cost is $70. I think it's more like $30-40.

Thu, 08/16/2012 - 14:52 | 2711627 Squid Vicious
Squid Vicious's picture

must be those evil speculators again... damn they're pesky sons-a-bitches, huh?

Thu, 08/16/2012 - 14:54 | 2711638 ekm
ekm's picture

Speculators are good people. They do NOT have storage capabilities.

That domain belongs to JPM, GS, Blackrock etc.

Actually, speculators are the suckers.

Thu, 08/16/2012 - 14:59 | 2711671 Squid Vicious
Squid Vicious's picture

with all respect ekm, wtf are you talking about  ?

Thu, 08/16/2012 - 15:02 | 2711688 ekm
ekm's picture

A lot of reading.

I am not surprised at this reaction.

Thu, 08/16/2012 - 15:35 | 2711842 CrashisOptimistic
CrashisOptimistic's picture

Why would you care care about storage.  

It's stored underground in the oil field.  Or it's stored above ground.

The danger in your perspective is thinking in terms of the phrase oil production.  Oil is not produced.  It is extracted.  You don't produce it and then store it.  It's already stored.

Once you pay for the pipes and pumps, it doesn't cost anything more to store it below ground vs above ground.  Might even cost more to store it above ground.

The reason the price to **extract**, not produce, is high, is that you have to keep drilling holes as the old holes go empty.  The new holes cost money.

But this has nothing to do with storage costs.

Thu, 08/16/2012 - 15:39 | 2711860 ekm
ekm's picture

I'm talking about STORAGE CAPACITY, not costs. Costs don't matter since JPM has access to ZIRP.

Thu, 08/16/2012 - 15:45 | 2711892 CrashisOptimistic
CrashisOptimistic's picture

But ekm, that does not address your error.

Saudi Arabia has more STORAGE CAPACITY than JPM or GS or whomever.  So does Iran.  So does Exxon.  They all have more storage capacity than JPM.

JPM leasing tankers is completely irrelevant to this matter.  They are just speculating on price, and they are doing nothing more than any country that might choose to close their spigot slightly. JPM has less storage than Exxon.  They and Exxon and KSA are just speculating on price.  Why should they extract from storage and sell at a low price?

There is nothing special about JPM's miniscule storage capacity compared to, say, Trinidad's.  Trinidad may even have more.

 

Thu, 08/16/2012 - 16:17 | 2712036 ekm
ekm's picture

Do not forget supply/demand law. How high can the price go, that it will cause zero demand?

Regardless of the artificial scarcity due to storage of crude oil, supply/demand law is as good as gravity law.

Thu, 08/16/2012 - 15:53 | 2711928 Flakmeister
Flakmeister's picture

BINGO!

Peak Oil is the point at where free money cannot increase the supply...

From 1994-2004 2.4 trillion dollars in CAPEX gave us about 10 mmbpd more production

From 2005-2010  2.4 trillion gave us a net decrease of 200,000 bpd of production....

Son, costs do matter....

Thu, 08/16/2012 - 15:37 | 2711844 Spastica Rex
Spastica Rex's picture

Ayn Rand?

Thu, 08/16/2012 - 15:40 | 2711868 ekm
ekm's picture

I have never read Ayn Rand. I probably will, but it's not in my plans right now.

Thu, 08/16/2012 - 15:53 | 2711931 Flakmeister
Flakmeister's picture

Spare yourself....

Thu, 08/16/2012 - 16:01 | 2711978 Squid Vicious
Squid Vicious's picture

FYI - Alisa Rosenbaum... hope that helps your planning!

Thu, 08/16/2012 - 15:07 | 2711717 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

EROEI ekm.  It is dropping.

Thu, 08/16/2012 - 15:11 | 2711736 ekm
ekm's picture

EROEI is very misleading.

River energy is fro free, it is not spent. Gravity energy is for free, it is not spent.

It could apply to 30-50 years from now, even that how can one calcuate stuff 50 years away.

Thu, 08/16/2012 - 15:34 | 2711810 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

How do you capture river energy?  With a dam.  What is a dam made of?  Concrete.  How do you build the concrete dam?  With machines.  What do the machines run on?  Oil.

Factor in maintainence costs over time for dams and what is the EROEI of them then?

What are solar voltaic panels made of?  Oil.

What is the halflife of nuclear waste, and therefor what are the storage costs?  What is the EROEI if the storage costs are infinite?

What has the highest EROEI?  What has peaked production in all Western Nation-States?  Oil.

Why do so many geologists say oil production is peaking in Saudi Arabia?  If oil peaks production in the KSA, how will oil lift it's EROEI considering the KSA is known as the "swing" State?

Any questions?

Thu, 08/16/2012 - 15:35 | 2711837 ekm
ekm's picture

Saudi Arabia's oil production is the best kept secret in the world.

The so called scientists, calculated that the reactor in Japan had 1 chance in many milliions to have a disaster.

The calculation took place in 2004. It took only 8 years.

Thu, 08/16/2012 - 15:52 | 2711927 CrashisOptimistic
CrashisOptimistic's picture

Second best.

China's domestic oil production is #1.  They report a number and tracking agencies go grab it, but there is zero verification.

Thu, 08/16/2012 - 16:00 | 2711971 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They are using saltwater to pump the last oil out of their reserves.  That is no secret, that is desperation.

Thu, 08/16/2012 - 16:09 | 2712002 Flakmeister
Flakmeister's picture

In all fairness Ghawar was developed with a water drive from the get-go...

The fact that their wells water out and are shut and the water cut is rising is a bigger tell... 

Thu, 08/16/2012 - 15:42 | 2711879 Spastica Rex
Spastica Rex's picture

Hydrogen will replace oil.

Electricity from renewable resources will replace oil.

The sun provides all the energy we need.

Oil is endlessly made by faeries living deep underground.

 

If we can't have never-ending energy growth, everything changes. Everyone understands this at some level.

Thu, 08/16/2012 - 15:54 | 2711941 Flakmeister
Flakmeister's picture

It takes some here a *lot* longer than others...

Thu, 08/16/2012 - 14:56 | 2711650 ekm
ekm's picture

That's how Gold is manipulated.

Buy it, store it, and then..........lease it.

Thu, 08/16/2012 - 15:10 | 2711726 malikai
malikai's picture

I think you mean, buy it, store it, lease it, sell it, sell it short, sell it short again a hundred times more, then lease it some more, the rehypothecate the leases and shorts to "balance" your book.

Thu, 08/16/2012 - 15:13 | 2711748 ekm
ekm's picture

One of the schemes, for sure. JPM and others are not forced to show the shorts on their balance sheets and the gov allows that since they are cooperating together.

Leasing something one does not have, is basically shorting.

Thu, 08/16/2012 - 14:46 | 2711577 Hohum
Hohum's picture

ekm

TPTB cannot do that.  Lower stock prices.

Thu, 08/16/2012 - 15:01 | 2711676 ekm
ekm's picture

The Gold manipulation scheme is being copied into stocks and oil.

Buy, store..............lease.

Central Banks have doing that with Gold since forever, but Gold can be easily stored and gold production is low.

That's not the case with oil, there is a limit to storage in space and time.

That's not the case with stocks, if stored there won't be any stocks left to trade, hence a time and space limit again.

With gold, time and space limit does not apply.

Thu, 08/16/2012 - 14:49 | 2711598 NotApplicable
NotApplicable's picture

Correct price? LOL, that's teh funnah!

Thu, 08/16/2012 - 14:51 | 2711620 ekm
ekm's picture

Supply and demand price is at about $50 as far as I see it.

The intermediators with storage capabilities make it go far higher.

Thu, 08/16/2012 - 15:41 | 2711873 Flakmeister
Flakmeister's picture

You have to be a troll....

Thu, 08/16/2012 - 15:43 | 2711885 ekm
ekm's picture

Incorrect.

Thu, 08/16/2012 - 15:45 | 2711895 Spastica Rex
Spastica Rex's picture

Moron? Do I win?

Thu, 08/16/2012 - 18:40 | 2712500 ekm
ekm's picture

You win.

Thu, 08/16/2012 - 14:38 | 2711539 Hype Alert
Hype Alert's picture

Vote buying with the SPR.  I can't even say that's hard to believe.

Thu, 08/16/2012 - 14:39 | 2711540 Meesohaawnee
Meesohaawnee's picture

good thing obama caught those evil doers those speculators.

Thu, 08/16/2012 - 14:39 | 2711541 Gypsyducks
Gypsyducks's picture

Announced three minutes before the September crude options expiration.  Classic.

Thu, 08/16/2012 - 14:39 | 2711544 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Because it is another way of buying an election.

Thu, 08/16/2012 - 14:40 | 2711548 devo
devo's picture

How long before Obama creates "gas stamps" via executive order?

Thu, 08/16/2012 - 14:52 | 2711619 Mercury
Mercury's picture

He won't have to.

What can't you buy (officially or otherwise) with an EBT card right now?  And how much smaller do you think that list will be by this time next year?

Thu, 08/16/2012 - 15:35 | 2711840 XitSam
XitSam's picture

I just realized, yes I'm slow, that the new ration cards will be tied in to the EBT card, everyone will have one. And it will be tied to your vehicle limiting the black market. And they will have a record of where you travel, etc. The EBT card will be used even if paying cash, to see if you're hoarding. Sorry, only Egg McMuffin a month for you. "The government is here to help."

Thu, 08/16/2012 - 16:42 | 2712129 AustriAnnie
AustriAnnie's picture

Except that those with EBT cards and those who have gas cards paid for by their employers sell gas/diesel on the black market. 

You cannot limit the black market by rationing.  Rationing just makes the black market A) more essential, and B) more profitable.

Furthermore, if the gov't tries to connect EBT cards with registered vehicles, or tries to track EBT black market activity, they will rapidly lose a large number of their voters.  Many of those who use EBT: 1) already exchange EBT purchases for cash, 2) often are employed in cash under the table jobs to hide their earnings so that they can continue receiving benefits, and 3) are often the same group of people who drive unregistered and uninsured cars.  4) Many are minorities and "low-income", so if they start arresting them for criminal activity they are going to have racial- and class-based tensions that will not be good PR for elections.  This is the same reason they allow seniors to bring billions of dollars of illegal pharmaceuticals in from Mexico each year: they cannot be seen to be cracking down on the "needy" and "underpriveleged".

They cannot piss off the entitlement class by tracking their every move.  They need the entitlement class to stay in office.

Thu, 08/16/2012 - 14:40 | 2711549 buzzsaw99
buzzsaw99's picture

come on guyz, this is definitely bush's fault. [/no sarc. intended]

Thu, 08/16/2012 - 14:49 | 2711551 Mercury
Mercury's picture

I'm sure any number of Dems (not just Biden) will be happy to say with a straight face that Obana's re-election is vital to national security/stability/prosperity.

Therefore the SPR will be brought to market as needed. Next question.

Thu, 08/16/2012 - 14:41 | 2711558 Papasmurf
Papasmurf's picture

Blue light special on oil, isle 12.

Thu, 08/16/2012 - 14:43 | 2711564 Ivanovich
Ivanovich's picture

Bullish (like everything else!) 

 

Market rockets higher.

Thu, 08/16/2012 - 14:46 | 2711578 timbo_em
timbo_em's picture

Is this SPR release a sign of desparation or a sign madness? What's next on their agenda? Nationalising big oil because they are not investing enough and their profits are too high?

Thu, 08/16/2012 - 14:47 | 2711580 Meesohaawnee
Meesohaawnee's picture

and just to show how blind the sheep are. Crude trades lock step with the rigged market for the most part. So while its Yippee Down 20,000 main street gets butt fucked in the ass again and doesnt even know it. Way to go speculator enforcer in Chief. Bullish!!

Thu, 08/16/2012 - 14:47 | 2711584 Jason T
Jason T's picture

what about them refineries that shut down because of EPA regulations?  

Thu, 08/16/2012 - 14:48 | 2711587 Squid Vicious
Squid Vicious's picture

stock "market" has officially gone full retard... look at the homies.. wtf

Thu, 08/16/2012 - 14:56 | 2711639 khakuda
khakuda's picture

Man, you are right.  Some homies look like they are going into another bubble straight up trajectory.

Congrats to the Central Planners for creating the same bubbles over and over again.  Genius.

Thu, 08/16/2012 - 14:48 | 2711593 Catullus
Catullus's picture

This is a total bluff. They don't "release" anything. They just don't bid into the market. They're not selling any oil.

When in doubt, just assume the government is lying to you.

Thu, 08/16/2012 - 14:51 | 2711612 UTICA CLUB XX PURE
UTICA CLUB XX PURE's picture

Gay-Boy-In-Chief Awakes: White House "Dusting Off" Plans For A Strategic Vasoline Petrolium Jelly Release.

 

There, fixed it for ya...

Thu, 08/16/2012 - 14:51 | 2711614 khakuda
khakuda's picture

C'mon Obama, the Fed wants higher prices for everything, oil included.  What don't you get?  They want inflation and what better way to get it!  They tell us inflation will create growth and solve everything and they must be right, mustn't they?  They are the Fed, they are annointed, you can't fight them, they told us so!

You may have a Nobel prize, but you can't fight them either, especially from the golf course.

Thu, 08/16/2012 - 14:55 | 2711628 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

When you are guarding someone in basketball, and the offender with the ball does a headfake, you may leave your feet the first time.  You shouldn't leave your feet the second time, but maybe you do.  When the offender continually headfakes then you never leave your feet, and the fakes become obvious to the whole defense.  Defenders will crouch by passing lanes and crowd the ball disrupting the offense and making it very uncomfortable for the habitual headfaker.

Obama is a headfaker.  He screams out (litterally) "Who wants money?!" to crowds of unemployed people, he threatens "speculators" and he tells us he is getting out of wars.  He told us he would reduce the budget, he says he is for equal rights (same sex marriage) and one would think he would legaize the plant that grows like a weed (the irie bud) because he "choomed" in High School.

Yet Obama does nothing, he just pump fakes, head fakes, and gets the ball stolen from him.  When it comes to politics he should be the last guy on the floor, but the choices are the idiotic team from '08 of McCain/Palin, and he ran in the primary against his idiot VP and the satanic Hill Clinton.

In this world of a Hegelian dialectic, where even those that talk about the dialectic use it (here's looking at you, WGT), the confusion of society and culture outweighs the deepening peril of finance and the economy.  Once we see the politicians are all joking, because no one single person, let alone party, will ever fix this broken system, then maybe we can untie the bonds that enslave us.

The start is simple:  we can take back our right to use sound money.  We don't need the Federal Reserve, a private bank who creates fiat and makes us pay their losses by the unconstitutional income tax (because a tax must be aportioned), to tell us what to do.  We don't need anyone to tell us what to do.  Our rights are unalienable; they are truths, and we have the right to use whatever we want to hold wealth or trade for other goods.

Take back this right, and the bonds will break.  Take back this right, and the government will be at the behest of you.  Take back this right, and let freedom ring.

Buy Silver, or if you would rather, Buy Gold

Thu, 08/16/2012 - 14:52 | 2711629 Atomizer
Atomizer's picture

 

 

Last week, President Barack Obama announced that, in response to the loss of Libyan crude to the global market, he was ordering the largest release of crude oil from the federally owned Strategic Petroleum Reserve (SPR) in U.S. history; 30 million barrels over the course of the next 30 days, to be supplemented by another 30 million barrels from various other reserves controlled by other oil consuming nations.

http://www.forbes.com/2011/06/27/strategic-petroleum-reserve.html

If the Straits of Hormuz should be closed? Decisions, decisions, decisions..

Thu, 08/16/2012 - 15:21 | 2711782 CrashisOptimistic
CrashisOptimistic's picture

The US burns 17ish million barrels per day.  This was 2.5 days month 1, 2.5 days month 2 and 2.5 days month 3 -- coming from others.

Or viewed differently, it was 1 million bpd added to the system for 3 months.  Did he ever replace it?

Thu, 08/16/2012 - 15:25 | 2711800 aerojet
aerojet's picture

The Bush admin filled the SPR and then some--they ran out of places to store all teh oil they were trying to add to it.

Thu, 08/16/2012 - 15:56 | 2711952 CrashisOptimistic
CrashisOptimistic's picture

It's not hugely relevant, actually.  You just move it from underground one place and put it underground another place.

At most you spend a few pennies per barrel doing water seperation, but hell, the water probably leaks back into it under Louisiana, so why bother.

Thu, 08/16/2012 - 14:53 | 2711633 JohnFrodo
JohnFrodo's picture

Sell it, sell it all now, go long hydrogen

http://thinkingaboot.blogspot.ca/2011/06/eating-opecs-cake.html

Thu, 08/16/2012 - 15:37 | 2711852 Heyoka Bianco
Heyoka Bianco's picture

Hydrogen is not a viable replacement for oil, not now, maybe never. It more dangerous to handle, harder to store and transport, and far more chemically reactive than petroleum. Two hundred billion to replace the entire industrial and transportation infrastructure that's been built over the last century? That's pure fantasy.

Thu, 08/16/2012 - 15:50 | 2711915 LawsofPhysics
LawsofPhysics's picture

you missed the most obvious answer, the energy to produce the hydrogen still has to come from somewhere.  Hydrogen is not an energy source it is simply a store of energy or an energy currency.


Thu, 08/16/2012 - 15:54 | 2711940 malikai
malikai's picture

$200 billion? Isn't that about the cost of the F35 program?

Not to belittle your points which are all true.

Thu, 08/16/2012 - 16:59 | 2712200 JohnFrodo
JohnFrodo's picture

okay 201 Billion. As to the cost argue with Rifkin http://www.amazon.ca/The-Hydrogen-Economy-Jeremy-Rifkin/dp/1585422541

I dont want to argue the whole energy cost to make hydrogen, yes I understand it. But is it more than the energy cost to drill 35 miles under the ocean, or tar sands? Especially when hydrogen can be made from windmills and solar cells. In Germany a gallon of gas costs 8 bucks, and they dont blink.

Thu, 08/16/2012 - 17:14 | 2712248 Flakmeister
Flakmeister's picture

If you understood it, you would not even pose the question....

If you want to screw up the energy economics of electricity generation from solar and wind, use it to perform electrolysis....

Thu, 08/16/2012 - 14:58 | 2711666 sitenine
sitenine's picture

I wonder what the World might look like if we didn't worry so much about elections. I'm not denigrating democracy per se, but I worry that very poor decisions are made with alarming regularity with the only goal being that of 'winning'. Makes one wonder what 'winning' is all about, doesn't it? The way I see it is that the more they win the more we all lose because votes are more important than the sanctity of life itself for these self absorbed assclown politicians.

Thu, 08/16/2012 - 15:02 | 2711684 radicall
radicall's picture

Thanks for the timely heads up ZH! Sold some futures, in the money already.

Thu, 08/16/2012 - 15:02 | 2711685 Meesohaawnee
Meesohaawnee's picture

anyone have a crude chart bumped up against the Nas? i bet the two are very much the same.yup. its all about supply/demand right ??? cnbc told me so

Thu, 08/16/2012 - 15:07 | 2711715 radicall
radicall's picture

Of course it is supply and demand </sarc>. Check out this chart of Gasoline deliveries .. 30% below last year. I say we  either entered a recession last October or someone got really fuel efficient in a couple of months

 

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

 

Thu, 08/16/2012 - 15:24 | 2711794 aerojet
aerojet's picture

I've been driving a lot less--gave up one activity that required a lot of running around on weekends.  A lot of hybrids and other small cars in the parking lot where I work.  I've been looking at a compact for commuting, I have the opportunity to almost double my gas mileage from the 4-cyl. pickup I drive right now.  I'd say most people who have any smarts and means to act are trying to not get raped by high fuel prices right now.

What I don't see yet is a resurgence in carpooling and ride sharing that smartphone tech would make so much easier than in the past.

Thu, 08/16/2012 - 17:18 | 2712261 Flakmeister
Flakmeister's picture

You might want to look at the units on that graph very closely and reacquaint your self with what exactly is being plotted...

Hint: 50,000 galllons a day is about 1000 barrels a day or 0.001% of daily demand

Thu, 08/16/2012 - 15:11 | 2711735 robertocarlos
robertocarlos's picture

What is so difficult about paying 5 bucks for a gallon of gas? You'd pay that for a Big Mac meal.

Thu, 08/16/2012 - 15:19 | 2711772 radicall
radicall's picture

(most) Americans don't eat 5 big mac meals a day. 

Thu, 08/16/2012 - 15:43 | 2711884 Flakmeister
Flakmeister's picture

And most Americans burn 5 gallons of gas a day???

Thu, 08/16/2012 - 15:47 | 2711905 Spastica Rex
Spastica Rex's picture

Let them eat petrol!

Thu, 08/16/2012 - 15:56 | 2711954 Flakmeister
Flakmeister's picture

Effectively, we already do....

Love to see a plot show the Cost of a Big Mac meal vs a gallon of gas from 1970 on....

Thu, 08/16/2012 - 15:48 | 2711909 radicall
radicall's picture

Those with jobs. 5 Gallon 20 MPG*5 Gal = 100 miles. 50 miles each way is not unusual if you leave in the major Metros Like LA, SF Bay, DC, San Diego, etc. We don't have Subways like New Yorkers

Thu, 08/16/2012 - 15:55 | 2711946 Flakmeister
Flakmeister's picture

I think I spotted your problem....it might have to do with that 20 mpg.....

Thu, 08/16/2012 - 16:40 | 2712114 smiler03
smiler03's picture

You can eat a Big Mac (not that I ever would)

Thu, 08/16/2012 - 15:21 | 2711784 aerojet
aerojet's picture

Reminds me of "Gangs of New York" where everything is a fraud, but the mayor and police put up a false appearance of propriety around everything.

Thu, 08/16/2012 - 15:41 | 2711876 theprofromdover
theprofromdover's picture

The enemy of my enemy is my friend.

So in this instance, to head-fake the big-league speculators and open up the taps at Cushing, Barry is my pal.

(not for long I suspect)

Thu, 08/16/2012 - 15:58 | 2711962 falga
falga's picture

Iran, you are cooked

Thu, 08/16/2012 - 16:10 | 2712006 silverserfer
silverserfer's picture

release the -Oil kracken!

Thu, 08/16/2012 - 16:58 | 2712199 gookempucky
gookempucky's picture

Looks like jpm needs another 9 million barrels at 93 for the turn at 110---all stolen cash has been burned through.

Thu, 08/16/2012 - 17:12 | 2712241 Bear
Bear's picture

Just another October surprise. These criminals will do anything to get reelected ... Strategic = Get me elected in November

Thu, 08/16/2012 - 17:15 | 2712253 Bear
Bear's picture

As a measure of how broken our system is ... it use to be that rising oil prices led to sinking equity prices and now rising oil prices is touted as 'positive' for equities. Insanity reigns. Long live King George III.

Thu, 08/16/2012 - 17:30 | 2712301 Arnold Ziffel
Arnold Ziffel's picture

yes, so JPM can once again grab 50% of it like last time....I think 30 million barrels went directly to them instead of the so-called market.

Thu, 08/16/2012 - 18:33 | 2712482 Flakmeister
Flakmeister's picture

Hey... they had to cover the naked shorts they were told to initiate in a bald faced attempt to stimulate the economy with lower oil prices (while it lasted...)

Thu, 08/16/2012 - 18:57 | 2712545 lolmao500
lolmao500's picture

Yeah JPM totally didn't manipulate oil prices in 2008...

Thu, 08/16/2012 - 17:46 | 2712353 roadhazard
roadhazard's picture

Where is the oil going to be released, on the ground. Tankers sit full around the world and oil silos are brimming over minus what isn't "burning" or "under maintenance".

Thu, 08/16/2012 - 19:29 | 2712628 gnomon
gnomon's picture

Obummer will fully reveal himself before this election cycle is complete, if he can't make his re-election a shoo-in.  Should be quite a show.  

A well-connected dyke at DHS has crapped in their nest by engaging in some AC DC hanky-panky.  The director may be going home to her tool shed in Arizona.  

And Holder is walking wounded.

So Obummer is going to have to do it on his own, by hook or by crook, (mostly by crook).

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