Finally, we are going to start selling some of the oil we’ve been hoarding in storage. This isn’t the 1970’s anymore, where we’re wholly dependent upon foreign crude to fulfill our needs. Thanks to fracking, we have oceans of crude, both realized and to explore. The President’s budget calls for a drawdown of half of the 688.1 million barrels of crude being kept in the SPR — staggered out over the next decade. At current prices, sales would raise $16b in revenues, hardly enough to fund anything serious — but a sign that we’re not pavement apes bitterly clinging onto crude that doesn’t need to be held in storage.
The Heritage Foundation, a right wing ‘think tank’, wants to sell it all over the next two years.
“The SPR has not served its purpose, as Presidents have used the SPR as a political tool or failed to release reserves in a timely and impactful manner. It is time for Congress to recognize it is not the government’s role to respond to high prices. Congress should therefore pull the plug and drain the SPR once and for all.”
You’d think WTI would plunge on the news, but no one really cares. Truly, this is a market that does as it likes.
Bitcoins, on the other hand, are higher by another 6%. Futures are indicating a pop of 45 at the open.
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Not a chance Trump came up with a stupid idea like selling SPR into over-saturated petroleum markets. On the other hand, MK-Ultra programming would to that to you…
It’s not stupid. The SPR is pavement ape thinking. We can produce a fuck load of crude domestically. We can always buy it back from our own producers.
Sounds like cannibalization to me. Start selling SPR, price of crude drops, domestic producers go bankrupt. Never mind all the side effects that go w/ fracking.
A dumb, and poorly timed, idea among many out of this administration.
He calls for more drilling in Alaska in the future as well
Alaska is a money train once the libtard tree huggers fuck off
For example NAK. Watch it explode once they start up gold mining in their claims. The Russia bullshit is putting a damper on futures isn’t it. I imagine the 1% love money more than they do the Klintons so lets take the fucking handcuffs off this baby.
Buy High and sell low….sounds like a government idea
He’s just thinking like a businessman.
“Hmmmm, I have these assets I can liquidate to provide cash so I can do….”
He’s not a complicated person and that is what many find attractive. What you see is what you get.
OTOH…Wikipedia says the average price per bbl paid for all the petroleum in the SPR is $28.40 per.
Maybe Trump sees price going lower than that and wants to sell at a profit while he can.
Total value of the reserve at todays price would be around $33-34 Billion on an investment of $19-20B.
I’d take it.
As a real estate and business guy I imagine Trump sees excess reserves as a non performing asset better used elsewhere when the government has a deficit. This is something planned over the next 10 years. There are massive innovations taking place in the field of energy and in the ‘pipeline’ over the next 10 years and beyond.
Put in perspective of entire US economy and its +$20T debt load, it’s like saying ‘let’s sell couple pencils because we have one too many’, it’s a non performing asset.
The cost is irrelevant.
Sell it all before it becomes worthless in 20 years