Updates
Later, 9:32 a.m. CT: CNBC had a great explanation why the market is acting the way it is following the announcement. A very, very good explanation and in line with my thoughts. Actually, amazingly close. WTI is up 1.42%; up $1.09; now trading at $77.84, after the announcement. If that's the result, let's hope Brandon releases more crude oil from the SPR. LOL.
There was another reason why the price of oil might be up after the announcement that neither CNBC nor I mentioned, and that's a whopper. Again, a tease. I will let readers think about that. It gets tedious.
One almost has to laugh. Think about it ... step-by-step... first, it is agreed that there is a glut of oil -- in fact the US has four weeks -- four weeks -- of US crude oil supply ... double that is needed ... double the two weeks that was the historical norm .. and OPEC has said supply/demand is currently adequately balanced ... then second ... what happens next if oil is released from the SPR despite adequate oil already existing ... I can't wait to see the EIA's weekly petroleum report, looking specifically at refiners' operating capability ...
... this was nothing more than virtual signaling. It may bring the price of gasoline down in the near future ... but that's about it.
Original Post
Brandon announced today, Tuesday, that he would release oil from the SPR. It's probably not "legal" but we will see how it plays out.
The "elizabethwarrens" of the world hoped for two things:
- drop the price of gasoline; and,
- hurt the profits of the oil companies.
We'll see how far the price of gasoline drops.
But surprise, surprise: shares in oil companies are all up today. Does that surprise you?
- CVX: up 1.16%
- XOM: up 0.8%
- Shell: up 0.5%
- BP: up 1.31%
- COP: up 1.4%
Pre-market, after the SPR release announcement.
It seems counterintuitive.
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Surging
Airline passengers.
Shares in airline companies.
Jim Cramer has it exactly right.
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