U.S. plan to sell oil reserves

tommyjo

New Member
U.S. President Donald Trump's proposal to sell half of the United States' strategic oil reserve surprised energy markets on Tuesday since it counters OPEC's efforts to control supply in order to boost prices.

The White House requested in its budget released late on Monday gradually selling off the nation's Strategic Petroleum Reserve (SPR) starting in October 2018 to raise $16.5 billion. The U.S. SPR SPR-STK-T-EIA holds 688 million barrels, making it the world's largest reserve, and a release of half over 10 years averages about 95,000 barrels per day (bpd), or 1 percent of current U.S. output.

The plan came out just a day after Trump left Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), as part of his first overseas trip.

http://www.reuters.com/article/us-usa-oil-reserves-idUSKBN18J0T2

It is just stunning how little this administration understands anything. Donald Trump, the self proclaimed business guru, shows us once again that he just doesn't get it. What doesn't he get this time? Two things:

1. You don't spend your emergency stash when times are good. For oil consumers, time are good. Oil is around $50 per barrel and gas is around $2.30 per gallon. This is not the time to sell oil assets. Here maybe you all will understand it this way...they are selling low into a market that is oversupplied. They will put the nation at greater risk the next time there is an oil shock (and there WILL be a next time). Now we have to pin our hopes that a Congress that can't tie it's shoes will nix this stupid plan.

2. Good ole "Honest" Trump spent all day Sunday playing kissy face with the Saudis...they buttered him up and stroked his enormous ego...they gave him a deal to buy arms to make him look good...then he turns around the very next day and releases this POS proposal on them. Ha...guess that'll teach them! Wonder what the chances are now of that $110B arms deal growing into the $350B deal that was hoped for?
 

warneckutz

Well-Known Member
http://www.reuters.com/article/us-usa-oil-reserves-idUSKBN18J0T2
19l1uz.jpg

We know... we know...
 

GURPS

INGSOC
PREMO Member
It is just stunning how little this administration understands anything. Donald Trump, the self proclaimed business guru, shows us once again that he just doesn't get it.



did you miss the part where some of the sales will go to repairs and upgrades to the equipment ?


U.S. Prepares To Sell Off Its Oil Reserves


To be sure, part of the motivation to sell crude is to finance upkeep for the SPR itself. The reserves are held in salt caverns in Louisiana and Texas, setup decades ago in the aftermath of the Arab Oil Embargo in 1973. The SPR system can hold more than 700 million barrels of oil, the largest strategic stockpile in the world. The idea is that the SPR holds 90 days’ worth of oil supplies, which could be released in the event of a global outage. A release has only occurred a handful of times, such as the Persian Gulf War, Hurricane Katrina and the Arab Spring.

Some of the storage systems are rusting and corroding after decades of use. In September, the DOE issued a report to Congress, which came to a dire conclusion about the condition of the reserve. “This equipment today is near, at, or beyond the end of its design life,” the report said. The sale "will allow the Department to take necessary steps to increase the integrity and extend the life” of the reserve, a DOE spokesperson said in December after the budget resolution was passed.
 

SamSpade

Well-Known Member
(sigh)

It's not as though it's the United State's savings account - it holds about 45-50 billion dollars' worth of oil, or the amount of money Congress spends in about a week or less.
Obama has done as much - in 2011, during the Arab Spring, he also authorized a huge sell off, to offset the unstable market.
DoE did it again right after the election. The only difference this time is, it's about twice the Arab Spring one Obama did.

The same article and others also mentioned the opening up of ANWR (although the Reuters piece doesn't name it).

Like a lot of your posts, this is a tempest in a teapot.
 

philibusters

Active Member
I am with Tommyjo. Why would you sell off your reserves when prices are low. First off building back up your reserves when prices are twice as high is going to be way more costly. Second it seems with oil prices at about 40% of their value 5 or 6 years ago, you should wait for prices to increase before selling off your reserves.

To me it seems like the classic stock market mistake of buying high and selling low.
 

GURPS

INGSOC
PREMO Member
are you sure the Gov 'bought' the oil in the 1st place .... I read elsewhere it is 'paid' from Oil Well Leases or fees
 

SamSpade

Well-Known Member
I am with Tommyjo. Why would you sell off your reserves when prices are low. First off building back up your reserves when prices are twice as high is going to be way more costly. Second it seems with oil prices at about 40% of their value 5 or 6 years ago, you should wait for prices to increase before selling off your reserves.

To me it seems like the classic stock market mistake of buying high and selling low.

Except that's not the purpose of the reserve. It's not designed to be an ATM.
Originally it was an "emergency supply" but it's not even close now. It's used now to influence the market. The Saudis plan to lower production for another year - this discourages it.
We're talking selling off maybe 20 billion dollars worth of oil - and for the U.S., that's small change.

You don't wait until the train hits you to get out of the way.
 

Gilligan

#*! boat!
PREMO Member
They will put the nation at greater risk the next time there is an oil shock (and there WILL be a next time).

Whilst you were marooned in your drug-induced stupor for the last decade or so, we made a ton of progress toward being more energy independent. The conditions that helped lead to the emergency we faced in the 70s are no longer present.

You idiot.
 

h3mech

Active Member
get over it, yes sell what we don't need and bring down the deficit,
good job Sir (POTUS) you are doing everything you can to make a America better, my hat is off to you. keep up the good work and how do you tell he is doing a good job, the media just bashes him more. what are they going to say when they have more money in their pocket, and we have peace in the world after we blow the sh1t out of them and with the Arab NATO's help they can route out the bad ones in their own religion.


http://www.reuters.com/article/us-usa-oil-reserves-idUSKBN18J0T2

It is just stunning how little this administration understands anything. Donald Trump, the self proclaimed business guru, shows us once again that he just doesn't get it. What doesn't he get this time? Two things:

1. You don't spend your emergency stash when times are good. For oil consumers, time are good. Oil is around $50 per barrel and gas is around $2.30 per gallon. This is not the time to sell oil assets. Here maybe you all will understand it this way...they are selling low into a market that is oversupplied. They will put the nation at greater risk the next time there is an oil shock (and there WILL be a next time). Now we have to pin our hopes that a Congress that can't tie it's shoes will nix this stupid plan.

2. Good ole "Honest" Trump spent all day Sunday playing kissy face with the Saudis...they buttered him up and stroked his enormous ego...they gave him a deal to buy arms to make him look good...then he turns around the very next day and releases this POS proposal on them. Ha...guess that'll teach them! Wonder what the chances are now of that $110B arms deal growing into the $350B deal that was hoped for?
 
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Wishbone

New Member
Perhaps we could take a page out of the TV series The Last Ship and run powerplants on Democrats instead of oil or coal.
 

LightRoasted

If I may ...
If I may ...

Selling the "crude" Dubai crude oil to be replaced with some higher quality grade Sweet West Texas Intermediate?
 
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