Tuesday, November 23, 2021

SPR Release News To Be Released Today -- November 23, 2021

SPR release: that's the buzz, but it could change at the last moment. But as it stands now, expect Brandon to make a convoluted statement on releasing oil from the SPR. 

Note that a release is a "swap," not a sale. All oil released from the SPR must be re-paid later on down the road. 

Related:

  • in additon to SPR release, small but vocal group of US House dems also want ban on US oil exports; link here;
  • a bit of background first, public policy; Ballotpedia;
  • a ban could certainly happen; Obama supports a ban, apparently;
    • it's almost a bridge too far, but quite possible
    • huge chance that Dems will make a huge mistake on oil export ban
    • crude oil under $80 isn't even that expensive in the big scheme of things
    • a release would have only a temporary effect, and it's possible the price of oil will be much higher six months from now
    • Forbes not convinced it would be a good idea; link here;
    • would disrupt global channels that have been years in the making
  • would immediately raise Brent, and gasoline prices historically follow Brent pricing (per some talking head; I'm not convinced; one would think US gasoline prices linked closer to WTI)
  • questionable whether it's even legal; like many of Brandon's executive orders could be overturned by the courts;
  • US crude oil exports reached record levels in 2020 and remain high in 2021; EIA;

2 comments:

  1. i'm old enough to remember that we had a ban on oil exports (ex Canada and Mexico) for 40 years, up until they were legalized as part of a budget agreement at the end of 2015...i also recall a wide Brent to WTI spread, at least $15 and i think sometimes approaching double (without looking it up)....so if it happened again, US oil would sell like US natural gas does today, at a big discount to global prices... (recently, $30 to $40 in Europe & Asia vs $5 per mmBTU in the US)...good for US consumers, not good for US producers...

    & that's why it could happen again; consumers have more voters than producers do..

    ReplyDelete
    Replies
    1. You are quite correct. I’ll have to go back and look at the historical prices.

      Delete

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