For The Archives -- March 22, 2020

From March 13, 2020:

I haven't watched any of the news in the past 24 hours but a reader says "Trump hit a home run today." The reader mentioned two things. I'm sure I'm taking this out of context and the devil will be in the details but if this is accurate and this is how President Trump is thinking, wow, again, from the perspective of a businessman and not a politician.

With regard to Saudi flooding the market with oil for $25 - $35/bbl, President Trump says the US will buy up all that it has room for (think, SPR -- strategic petroleum reserve). Wiki says capacity of the US SPR is 727 million bbls; currently about 635 million bbls.

SPR: At an extra two million bbls/day from Saudi Arabia, let's see -- (727 - 635)/2 = 46 days. Fairly biblical. Forty days and forty nights. Unloading Saudi Arabia oil for $25/bbl into our US SPR. Gotta love it. [Later: apparently the SPR can receive about 685,000 bopd.]

Cushing: 85 million bbls capacity.

Corpus Christi / Gulf of Mexico: has been adding a lot of storage for quite some time.

It looks like if given the go-ahead, the US public and private entities could soak up a lot of $35-Saudi oil. Sure, eventually it comes to an end, but that's not how traders and businesswomen think. Gotta love it. Even if it doesn't do much for the price of oil, we can let the Saudis know we love the price at which they are willing to give their lifeblood away.

From a google search today. Again, The Washington Post, in another anti-Trump op-ed piece, completely misses the point.