U.S. TO DOUBLE SIZE OF STRATEGIC PETROLEUM RESERVE
January 23rd, 2007Well, well, well…
And this is the energy plan for the future…
Via: Bloomberg:
Crude oil surged the most since hurricanes devastated the Gulf of Mexico coast in September 2005 after the U.S. said it will double the size of the nation’s Strategic Petroleum Reserve.
The reserve will increase from its current capacity of 727 million barrels of oil to 1.5 billion barrels over the next two decades, Energy Secretary Samuel Bodman said today. Bodman said the U.S. will start buying 100,000 barrels of oil a day this spring to expand the stockpile. Prices rose earlier because cooler U.S. weather will increase fuel use.
“Doubling the size of the SPR would add significant upward pressure on oil prices,” said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. “It would remove a significant amount of supply from the market. Refiners will have to spend more to get the available barrels.”
Crude oil for March delivery rose $2.46, or 4.7 percent, to $55.04 a barrel, on the New York Mercantile Exchange, the highest close since Jan. 9. It was the biggest one-day gain since Sept. 19, 2005. Prices are 19 percent lower than a year ago.
The U.S. reserve and similar stockpiles in Europe and Asia are held to make up for disruptions of global oil supplies. The U.S. tapped reserves in 1991 after Iraq invaded Kuwait and in 2005 after hurricanes disrupted pipelines, refineries and Gulf of Mexico production.
“We will have to fill the reserve at the rate of 100,000 barrels a day for the next 20 years,” said Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies in Washington.
You called oil’s move down when those idiots at Barclays were saying to look for oil to keep falling. You flat out said: bullshit. Buy call options right here.
https://cryptogon.com/?p=207
It’s weird to think that a “respected” company like that can screw up so badly while a guy on his blog, sitting in the middle of nowhere in New Zealand, calls bullshit on the entire thing, AND GETS IT RIGHT?!
This is just too much to believe.
hahahahahah!!! WayOut, it is so true! It’s like in shakespeare, the fool/jester character is always the smartest guy in the whole thing.
Excuse me Mr. Savinar…who’s the fool/jester here? I’ll give you a hint: it’s not Kevin.
Hmmm, going from 700M barrels to 1.5B barrels.. well let’s see here. The US consumes 20M barrels per day. Which means the current stockpile would last a little more than 30 days (in the case they’re drawing entirely from the stockpile). So this ups it to a little over 60 days.
Congratulations US Gov’t for your “long term” thinking. This really solves the energy problem, I’m glad you’re looking out for us.
Guys,
While oil’s recent move down was about as obvious of a setup as I’ve ever seen, I’m not too excited about that call.
Why?
Because I wouldn’t trade the thing myself. Without money on the line, it’s just pissing in the wind. It’s not real.
I’ve traded my own account to survive. I know the difference between talking about pulling the trigger and pulling the trigger. There’s a BIG difference.
I’ll write stories like that, on occasion, when I see that things have gotten too weird to ignore, but horn tooting on my part isn’t justified here.
If I was calling setups, trading that garbage myself and winning, that would be different.
I’m not doing that. I’m not capable of doing it. I wouldn’t want that kind of pressure, in any event.
That’s why I put WARNINGS on posts like that. In the end: IT’S GAMBLING. I don’t like gambling because the house always has the advantage.
I don’t know how many times I’ve said it, but:
Get into a situation that eliminates your reliance on luck and minimizes the impact of factors that are completely beyond your control. Do this immediately.
Kevin,
Kudo’s on your call re oil the oil price and what would happen to its price. Bah. I left the stock market (except for a saving plan that I have no control over) and have put whatever discretionary cash I have into precious metals. Stuff I can hold in my hand. This is enough of a gamble for me! Though I do appreciate your tip! If I were an idiot like Bodman and Bush I’d tell you where I store my treasure. HEY WE”RE GOING TO STOCK UP OUR RESERVES IN THE SPR! IDIOTS! Bombs away. Idiots. All of them.
I DOUBT whether anyone in DOE actually KNOWS whether the salt domes at the SPR have the capacity to hold twice the amount of oil they currently contain. The reserve is already filled to an unprecendented level. Want to wipe out U.S. oil reserves – ? Just head for the salt domes. IDIOTS.
One other thing… Technically, my call isn’t correct yet. Those way out of the money call options for March are still way out of the money. It’s going in the right direction, but we’ll need to see some follow through, probably news driven, for that thing to really run.
Eileen: Re: capacity of the SPR. I was wondering the same thing myself!
I see this move as a hedge towards a war footing. More socked-away petroleum for the forthcoming “escalation” in the middle east. The US D.O.D. uses almost 1/4th of total US consumption, and with things heating up with Iran, this is a military strategy move, not a market one.