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?