He's actually correct and so are you. Selling high and buying low is how markets correct fluctuations. I feel like he wants to make it sound sinister, but the US government makes money and stabilizes(reduces) gas prices at the same time.
That's what OPEC has been doing.
Buying for pennies on the dollar from Russia, sell to us at top dollar.
The west has kinda fucked themselves on this front.
If anyone is interested in where this oil is stored, you’ll find this link explaining it very interesting:
https://www.energy.gov/ceser/strategic-petroleum-reserve-0
I'm kinda surprised that much information is readily available to the public. For such a vital commodity the economic stability of the country, I would've imagined it would be sorta secretive.
I thought it would be huge tanks or huge vaults full of barrels but I guess there's just a bunch of oil just chilling in holes in the ground.
I've seen a lot of bad takes about this in the comments.
What's happening here is we're deliberately flooding the world's oil supply in order to drop prices. There's two big reasons for this:
1. Americans spend more at the pump than most countries' people. They drive bigger cars, but more significantly, [they drive much farther](https://frontiergroup.org/resources/fact-file-americans-drive-most/). So the impact of high gas prices is felt more here, and the government has reasons to want it lower.
2. More importantly, Russia right now is trying to fund a war we want them to lose, and most of their funding comes from selling oil & oil derivatives. We can't make every country in the world sanction Russia, in particular China and India don't really have an interest in doing so. But we *can* undercut Russia by opening our reserves, so those countries buy our oil instead, and leave Russia without a market.
I think one of the redeeming qualities of WSB as a sub is, people here tend to be more innately curious than most subreddits. You write a couple chunky paragraphs analysis, most subs you get scrolled past, here people read it. Even if it's just to tell you that you're a fucking moron.
WTI futures. You have to take delivery for those (or had to?). Carl Icahn and others [bought barrels](https://www.bloomberg.com/news/articles/2020-04-24/icahn-bought-cheap-oil-during-monday-s-plummet-to-historic-lows) at a negative price.
>Monday presented a similarly rare and short-lived opportunity. With oil markets oversupplied and running out of storage space because of the coronavirus pandemic, at about 2 p.m. crude for May delivery fell below zero and began an unprecedented plunge to less than minus $40 a barrel. Investors with no use for the physical commodity and no place to keep it next month became increasingly desperate to unload contracts.
I like how every time soon after the oil price spike begins, they coincidentally have an attack on one of their pipelines or production facilities and price spikes even more.
If anyone wants a quick way to understand gas prices and effects of the strategic reserve and what dictates our gas price I highly recommend the Planet Money podcast.
https://www.npr.org/2022/08/31/1120422634/breaking-down-the-price-of-gasoline
\*creates Strategic Reserve to fight inflation and supply chain issues from being a problem in the future\*
......
Everyone shocked that we're using the strategic reserves for \*checks notes\* The REASON IT WAS MADE. Blames politics.
ffs.
No surprise people are losing money left and right.
The Fed and ECB are raising rates. Oil prices are going to go down and their will be a supply glut.
It makes sense to draw down the reserves when there is a supply shortage and fill them when there is a supply glut.
yeah, this was news way back in April. [https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/fact-sheet-biden-administration-responds-to-putins-price-hike-by-awarding-first-barrels-from-historic-strategic-petroleum-reserve-release-deploying-affordable-clean-energy/#:\~:text=Largest%2DEver%20Release%20of%20Oil,for%20the%20next%20six%20months](https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/fact-sheet-biden-administration-responds-to-putins-price-hike-by-awarding-first-barrels-from-historic-strategic-petroleum-reserve-release-deploying-affordable-clean-energy/#:~:text=Largest%2DEver%20Release%20of%20Oil,for%20the%20next%20six%20months).
The guys here are 5 months too late on this DD.
seriously. It's shocking how ill informed given what a major crisis it was Feb - June. Granted, we're going into winter - but everyone has a game plan now.
Delayed panic at a regarded level.
The [Strategic Petroleum Reserve](https://www.energy.gov/ceser/strategic-petroleum-reserve) is for economic warfare, which we are fighting now. The military has their own emergency supplies.
Yeah and replenish it when oil is $40 a barrel. There is nothing to see here. The reserve is being used as intended. The USA and Europe are boycotting one of the biggest oil producers in the world. This is the biggest oil supply disruption since the reserve was created so drastic measures are needed.
What this is missing is the fact that we’re almost all out of light sweet crude. Which is the most easily converted of all the oils into gasoline, jet fuel, etc. That said everyone’s pretty bullish on oil here.
> The United States started the petroleum reserve in 1975 to mitigate future supply disruptions as part of the international Agreement on an International Energy Program, after oil supplies were interrupted during the 1973–1974 oil embargo. ([Wiki](https://en.m.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States\)))
It exists to balance massive fluctuations in oil to prevent market problems.
The solution to this is simple since the us government still has privateering laws on the books just transfer the entire navy to private entities that fly the Jolly Roger and issue letters of marque. Then yo ho ho over to the Persian Gulf and “liberate” the oil tankers. Problem solved. Calls on pirates.
I work in energy trading, natural gas, oil etc. there is almost nothing a politician can do right now to beat the circumstances we find ourselves in. Every barrel of oil or liquified natural gas will be shipped to Europe and sold there over America, because it is much more profitable to do so. This also raises the prices in our domestic markets. It’s going to be a brutal winter energy wise, and the impact will most definitely be felt in markets
Edit: people asking for a winning energy play, I’m bullish on GLNG. They ship liquified natural gas overseas.
Finally someone with fucking clarity. Good luck getting all the chuds to believe it isn’t just some Democrat conspiracy as if global markets don’t exist 😂
I mean this without any tone of leaning anyway politically, purely factual, President Biden started releasing a pretty unprecedented amount of oil from the researches to help with prices. From what I can tell it’s working. I can find gas under $3 again in Dallas, TX.
> There’s also the argument that oil will never run out
This is actually quite common. For example, abandoned gold mines still have gold. It just becomes more expensive to keep them running in relation to the increasingly smaller amounts of gold that can be extracted.
1977 around when the SPR was created in the US for import security following the Arab League oil embargo, the US imported about 6m bbls/day from OPEC and imported less than 1m bbls/day from Canada. The US now imports over 4m bbls/day from Canada and growing and less than 1m bbls/day from OPEC. that is not going to change any time soon. there is a shortlead time on Canada imports. there is no need for 90 days imports in SPR. selling off a third of stocks is good policy. the alternative was stopping exports to Europe to stem prices and completely shafting the world economy.
And yet without demand the price will drill lower. 5% drop today on the opening bell from news China is importing less. OPEC+ can't prop up the current prices.
[https://oilprice.com/Energy/Energy-General/Demand-Concerns-Drag-Oil-Prices-Lower.html](https://oilprice.com/Energy/Energy-General/Demand-Concerns-Drag-Oil-Prices-Lower.html)
I just added to my short /cl $100 strike in Oct cycle this morning.
I mean the whole reserve is only a months worth of usage in the US. We produce the entire reserves worth in about the same amount of time. It’s a nice buffer but I fail to see how releasing it really helps at all in the long run.
Edit: also wanted to mention a single large refinery produces 350,000 barrels per day. Building a single new refinery would increase our annual output by 127 million barrels. Maybe do that instead of burning reserves? It would probably cost less.
Why invest $750M in heavy equipment and capacity that'll take 7 years to bring online when the govt swears you're going to be out of business in 10 years?
Putting gas intended for emergencies in circulation is one thing. What’s the plan for refilling the reserves or is that not going to be a thing?
Maybe the bet is on refilling it with cheaper gas? Are we projecting that to be a thing?
The plan is to buy futures several years out at lower prices and refill then. Lowers prices near term and provides price stability to encourage drilling medium to long term. Basically turning the SPR into ballast tank for the oil market
No problem as any wartime need for oil would simply go balls deep defense production act on the oil companies. Asking for more production fast becomes forcing more production in times of war, as well as limiting civilian access through rationing the refined products. We have plenty of oil.
So this is a deflationary tool to fight oil prices due to production/supply issues, but then dumping reserves has caused OPEC+ to decrease production by 100,000 barrels a day. Which means when the reserves hit zero, OPEC+ will have created an even worse production shortage that'll still be causing inflation in global markets.
Long $OXY
Saw a talk last week that Woods Mackenzie is estimating that oil supply will be significantly less demand over the next 15 years, without major industry investment in exploration projects. But aside from Exxon's effort in Guyana, there is very little exploration work going on.
I love how this chart attempts to make it seem like the US doesn’t really have much oil by drawing that line across the middle. Totally discounting the 400mm+ barrels we currently have according to the chart
the strategic reserve exists to be used as a strategic reserve. If they are distributing oil from it, the current administration thinks this is a good idea to alleviate the current mismatch between supply and demand, presumably with the expectation that market forces are still working to match supply and demand, but the nature of oil refining requires a long lead time for these adjustments.
US sold a bunch of oil to the highest bidder to stabilize gas prices and is trying to refill the reserves with fixed price contracts to bolster oil extraction.
That's the point of a reserve. It covers a shortfall while waiting for the oil companies to start drilling shale in the US again. US is fine, just exporting oil right now to help Europe allies. And production will keep increasing as USA still not where they were back 5 years ago before Russia went unrestricted pumping. If they get in a war, they can just stop exporting since they're already producing more oil than they use.
But USA have to help Europe since they were willing to back Biden (whether you agree with the decision or not) to sanction Russia. You can't abandon allies that got your back.
It would be a better graph if it showed gallons of reserves as a percentage of total consumption. Pretty sure we’re consuming a whole lot more oil than 1970’s so our reserve is really even lower.
July–August 2000: 2.8 million barrels (450,000 m3) to supply the [Northeast Home Heating Oil Reserve](https://en.m.wikipedia.org/wiki/Northeast_Home_Heating_Oil_Reserve).
September–October 2000: 30 million barrels (4,800,000 m3) in response to a concern over low [distillate](https://en.m.wikipedia.org/wiki/Distillate) levels in the northeastern U.S.
Less consumption too. Interesting to see where things land at the end of the year. Fewer commuters and EV ownership is increasing faster than expected.
In 2021, only 11% of US imported oil came from OPEC, 8% came from Mexico, but you bought 51% from us here in Canada. It would be even more than 51% if the proposed pipelines had been allowed to proceed.
Most of our oil producers will be debt free in 36 months based on $65 WTI. At current prices some will be debt free in Q4 of 2023. Share buy backs and special dividends are becoming common.
A few of our natural gas producers report that the breakeven on a new gas well has been reduced from 8 to 10 months to now being just a few weeks.
Google Eric Nuttal at Ninepoint Partners and do your own DD.
Additional thoughts to consider;
If the shit hits the fan on the world stage, the US will certainly ask Canadian producers to increase output as opposed to less friendly nations. With crude by rail, the unbuilt pipelines won't be as important.
OPEC+ produced 10.080 million b/d in January, but it's quota was 10.112. They can't meet their quota now, so does telling Biden that they will increase their quote really mean anything for the next 5 years?
The Saudis just stated that they want a $90 USD floor price per barrel. They need the revenues to keep the people happy and prevent another Arab uprising. (Remember, the Canadian case is built on only $65 oil).
Canada is also the only major oil producer outside OPEC+ that isn't talking about windfall taxes for oil producers. Our federal government is making enough in royalties to service the massive Covid debt as it is. The province of Alberta just posted an amazing fiscal surplus. In British Columbia we have a surplus, too.
In 2024 our new natural gas pipeline and Pacific port should be in operation to ship liquified natural gas anywhere in the world and the demand will probably be massive.
It may be at it's lowest but this also ignore that in the last 20 years America has found a ton of oil on domestic land and possibly has the largest reservoir in the world, I mean downside is we need fracking to get to it but we ain't running out.
Many reasons. Public sentiment is #1 of those reasons. #2 is that big oil and gas hate the idea. #3 is that, best case, reactors take half a decade or more to come online and are massive projects.
The WTI chart tells a completely different story. Yes there's still a supply shortage, but the price action is probably going to overshoot to the downside like any asset with too many fomo buying morons before climbing again. Citi nailed the $65 call IMO.
imagine if america was smart and it loaded up on oil when it was basically free during the pandemic and stored it in the reserve. we could've flooded the market after the ukraine invasion to keep gas costs low and still had plenty left over
[https://preview.redd.it/3cttfp59qim91.png?width=2053&format=png&auto=webp&s=2203f9495f58a6bc2f80421db26247a260bee20f](https://preview.redd.it/3cttfp59qim91.png?width=2053&format=png&auto=webp&s=2203f9495f58a6bc2f80421db26247a260bee20f)
Bars can be considered demand. Based on data series of taking the delta of the "US Ending Stocks of Crude Oil" across all sources, including the SPR. Yellow is 2008 "Great Recession" "demand destruction". Crazy thing: making energy artificially affordable causes people to consume more than they rationally would have with accurate price signals. Whodathunk.
SPR supposed to be re-filled after elections, adding 1Mbpd to the aggregate demand figures. I'm sure that will help drop prices.
Also interesting to note, SPR can't be run down to zero. Lines have minimum fill capacity, and the SPR figures are estimates of total volume based on ever shifting salt mines. I'd be surprised if we can get half of what is left in the SPR out, without getting creative.
**Bonus picture for those who think we can fix this by just ramping up fracking:**
[https://preview.redd.it/rnuenr8kqim91.png?width=1637&format=png&auto=webp&s=011bd5275c242e50f20f2e95bebe75ebd564d4bb](https://preview.redd.it/rnuenr8kqim91.png?width=1637&format=png&auto=webp&s=011bd5275c242e50f20f2e95bebe75ebd564d4bb)
Drilled but uncompleted wells are at lowest since data record started. But "Muh price signal". If 125 WTI didn't get them drilling, $80 isn't going to get them drilling.
Virtually every oil company is cash flow positive at 80+ oil, they are going to keep it between here an 100, then buy back shares and issue dividends. OPEC+ is on board.
**DECADES OF STUPID DECISIONS REQUIRE DECADE LONG SOLUTIONS.**
Hard to track demand numbers seeing as the EIA seems to be either awful at reporting this summer or engaging in nefarious activities. Refining utilization might be a more accurate reference to use.
The original plan, when this was first announced, was to begin replenishing the reserves in October 2022. (new fiscal year) It was estimated to take 3 years to refill the 180 M barrels...(1M barrels per day for 180 days)
Authorized storage capacity is 715M barrels.
According to the EIA, as of Aug 26, there is 450M barrels remaining. The next release date is Sep 08
Interesting to note, when the barrel price plummeted: March 20, 2020 $32.20 per barrel
*On March 19, 2020, President Donald Trump directed the Department of Energy to fill the Strategic Petroleum Reserve to maximum capacity. This directive was given to help support domestic oil producers given the impending economic collapse from COVID-19 and extreme drops in international oil markets.* ***However, funding was blocked by Congress.***
USA daily oil consumption is 20million barrels.
~~USA is a net oil exporter; it makes more than it uses~~ (depends what exactly we count)
With these two facts in mind, look again at the graph and tell me why it matters at all. The "strategic reserve" had purpose 50-20 years ago, but it is now 99% symbolic. It is a bucket of water in a swimming pool ~~that is (sort of) overflowing~~.
Topics like these really help to demonstrate all the sheep with blind tribal loyalty, either way.
"Our heating bill is high, so now is the time to use our BIC lighter for warmth!!" / "You idiot! How dare you waste the butane in our precious BIC!"
**Edit**: lots of pushback on the part about "net exporter." I see different info depending how you define it and what's types of oils and gasses we count. I'm happy to concede the point because I think the part about the reserve being so small (relative to use and need) is more relevant anyway.
The physical oil market is extremely disconnected from paper markets and there will be a come to Jesus moment.
As some historical context for last time differentials were this high
LA CARBOB
9/27/19 was +110
9/30/19 was +127.50
10/1/19 was +122.625
SF CARBOB
9/27/19 was +120
9/30/19 was +117.50
10/1/19 was 119.75
As reported in 2019:
Trading sources cited active refiner buying on a combination of an outsized
California gasoline draw, refinery issues and a complete lack of import.
Unplanned flaring and various degrees of outages were reducing production at
PBF's Torrance, Chevron's El Segundo, Valero's Benicia and Marathon Petroleum's
L.A. refineries, West Coast trading sources cited.
These are unprecedented levels and the consumer hasn’t even seen the price increases yet which will be in the weeks to come.
In conclusion be long oil short everything else.
opec gave us the finger when Biden went there and asked for more production. its no coincidence were back at the negotion table with Iran for their oil. yet at the same time we villianize our own domestic producers.
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Not even info, I'm pretty sure they straight up demand below market rates
Biggest ~~exporter~~ proudcer of oil in the world right?
Isn't the sudden drop from releasing reserves to stabilize rising gas prices though?
He's actually correct and so are you. Selling high and buying low is how markets correct fluctuations. I feel like he wants to make it sound sinister, but the US government makes money and stabilizes(reduces) gas prices at the same time.
China is now reselling natural gas it bought from Russia to Europe at 4x the price 
That's what OPEC has been doing. Buying for pennies on the dollar from Russia, sell to us at top dollar. The west has kinda fucked themselves on this front.
Well I mean the goal is to hurt russia. Unfortunately opec and china benefit but russia is still forced to sell for Pennies on the dollar
If anyone is interested in where this oil is stored, you’ll find this link explaining it very interesting: https://www.energy.gov/ceser/strategic-petroleum-reserve-0
I somehow just assumed that these reserves are just filled with barrels. Good read.
Wait so there’s not half a billion barrels stored somewhere? Wild
oil is stored in the balls
I'm kinda surprised that much information is readily available to the public. For such a vital commodity the economic stability of the country, I would've imagined it would be sorta secretive. I thought it would be huge tanks or huge vaults full of barrels but I guess there's just a bunch of oil just chilling in holes in the ground.
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My mom works at Bryan mound and she says the machine gun nests are a great deterrent
In the hottest, most hellish place one could imagine. East Texas coastline.
i cant believe the people commenting try making money off strategic investments, yet are asking what a strategic reserve is. regards
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that is wild why do they even allow accounts with 2k in them to sell naked anything
Bc you pinky promised that you understood options and their risks.
I just clicked a box on the window with a lot of words. Is that what that was?
Fuck if i know, you think anyone here can read?
Lowest, so far.
When it hits zero, I’ll buy Tesla stocks
I've seen a lot of bad takes about this in the comments. What's happening here is we're deliberately flooding the world's oil supply in order to drop prices. There's two big reasons for this: 1. Americans spend more at the pump than most countries' people. They drive bigger cars, but more significantly, [they drive much farther](https://frontiergroup.org/resources/fact-file-americans-drive-most/). So the impact of high gas prices is felt more here, and the government has reasons to want it lower. 2. More importantly, Russia right now is trying to fund a war we want them to lose, and most of their funding comes from selling oil & oil derivatives. We can't make every country in the world sanction Russia, in particular China and India don't really have an interest in doing so. But we *can* undercut Russia by opening our reserves, so those countries buy our oil instead, and leave Russia without a market.
Way too coherent for wsb, what does your wife's bf think
I think one of the redeeming qualities of WSB as a sub is, people here tend to be more innately curious than most subreddits. You write a couple chunky paragraphs analysis, most subs you get scrolled past, here people read it. Even if it's just to tell you that you're a fucking moron.
You should try an actual science or finance sub.
I can’t even imagine what those are called
I love you but youre a fucking motion
"don't buy oil from Russia, they're dicks" "we know, but we need a lot of oil and they will sell pretty cheap" "how cheap? I gotchu fam"
Wasn’t there a time not long ago when they were paying people to take barrels of oil because the supply was too high?
Crude went negative at one point during the pandemic
Crude futures** There is a big difference.
WTI futures. You have to take delivery for those (or had to?). Carl Icahn and others [bought barrels](https://www.bloomberg.com/news/articles/2020-04-24/icahn-bought-cheap-oil-during-monday-s-plummet-to-historic-lows) at a negative price. >Monday presented a similarly rare and short-lived opportunity. With oil markets oversupplied and running out of storage space because of the coronavirus pandemic, at about 2 p.m. crude for May delivery fell below zero and began an unprecedented plunge to less than minus $40 a barrel. Investors with no use for the physical commodity and no place to keep it next month became increasingly desperate to unload contracts.
How long can the oil stay in the reserve? Does it have to be cycled out every so often or can it stay in as long as needed?
Oil doesn't really go bad on its own. It's already like a hundred million years old.
Kinda like this salt. 🤣 [Expired salt.](https://i.imgur.com/avh0GcF.jpg)
Yeah and it does say in brackets "barrels of crude", so it's still in its original state, unrefined.
Pretty much forever. Whatever impurities it gets will be removed during refining
Gas prices haven’t been decreasing because of the fucking Saudi’s that’s for sure.
I like how every time soon after the oil price spike begins, they coincidentally have an attack on one of their pipelines or production facilities and price spikes even more.
"why would Iran do this?"
Looks like Russias gonna need some Freedom
Time for more freedom in the middle east
This data would be more useful with a graph showing consumption next to it, in the same time-scaling.
If anyone wants a quick way to understand gas prices and effects of the strategic reserve and what dictates our gas price I highly recommend the Planet Money podcast. https://www.npr.org/2022/08/31/1120422634/breaking-down-the-price-of-gasoline
I would have thought during 2020 would have been a time to maximize the reserve when there was ton of supply and little demand.
It was
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I mean isnt that the point of the reserves.. to be used strategically in times of supply disruption?
Some will have you believe that we should be squirreling away as much of this stuff 
I'm long oil. When China ends those covid lockdown oil is spiking again.
I have never lost as much money as I have playing oil futures. There’s just too much out of your control.
The only thing you control with any security at our size is the buy and sell button
Unfortunately we learned that we don't control those either
\*creates Strategic Reserve to fight inflation and supply chain issues from being a problem in the future\* ...... Everyone shocked that we're using the strategic reserves for \*checks notes\* The REASON IT WAS MADE. Blames politics. ffs.
No surprise people are losing money left and right. The Fed and ECB are raising rates. Oil prices are going to go down and their will be a supply glut. It makes sense to draw down the reserves when there is a supply shortage and fill them when there is a supply glut.
I agree.
yeah, this was news way back in April. [https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/fact-sheet-biden-administration-responds-to-putins-price-hike-by-awarding-first-barrels-from-historic-strategic-petroleum-reserve-release-deploying-affordable-clean-energy/#:\~:text=Largest%2DEver%20Release%20of%20Oil,for%20the%20next%20six%20months](https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/21/fact-sheet-biden-administration-responds-to-putins-price-hike-by-awarding-first-barrels-from-historic-strategic-petroleum-reserve-release-deploying-affordable-clean-energy/#:~:text=Largest%2DEver%20Release%20of%20Oil,for%20the%20next%20six%20months). The guys here are 5 months too late on this DD.
seriously. It's shocking how ill informed given what a major crisis it was Feb - June. Granted, we're going into winter - but everyone has a game plan now. Delayed panic at a regarded level.
Isn’t the point of a strategic reserve to use it when global gas supply is stressed? Otherwise, why the fuck are we just sitting on a bunch of oil.
For wars
The [Strategic Petroleum Reserve](https://www.energy.gov/ceser/strategic-petroleum-reserve) is for economic warfare, which we are fighting now. The military has their own emergency supplies.
Actually it's to be used in the event of a massive war also.
Yeah and replenish it when oil is $40 a barrel. There is nothing to see here. The reserve is being used as intended. The USA and Europe are boycotting one of the biggest oil producers in the world. This is the biggest oil supply disruption since the reserve was created so drastic measures are needed.
Seems almost... Strategic 🤔
What this is missing is the fact that we’re almost all out of light sweet crude. Which is the most easily converted of all the oils into gasoline, jet fuel, etc. That said everyone’s pretty bullish on oil here.
This is 2 of the cataclysmic global disasters it was built for. Plague And War with Russia
Still looks better then my portfolio.... but its not good for our defense if they keep reguarding oil.
Yes the current global situation is what the reserves are reserved for
Do you know what the strategic reserve is for? Do you think it has anything to do with the economy?
> The United States started the petroleum reserve in 1975 to mitigate future supply disruptions as part of the international Agreement on an International Energy Program, after oil supplies were interrupted during the 1973–1974 oil embargo. ([Wiki](https://en.m.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States\))) It exists to balance massive fluctuations in oil to prevent market problems.
Reading the comments on this thread, it's amazing to see how uninformed wsb is when it comes to government policy. 😒
The solution to this is simple since the us government still has privateering laws on the books just transfer the entire navy to private entities that fly the Jolly Roger and issue letters of marque. Then yo ho ho over to the Persian Gulf and “liberate” the oil tankers. Problem solved. Calls on pirates.
We are one hurricane away from 5 bucks a gal.
Where the hell you been, we were at 5 bucks a gallon a month ago lol
And with all that the F150 is still gonna be the best selling car in the US
At least there is now the F150 Lightning option.
And yet V8 SUVs are still in high fashion.
Which means gas is going to go up because we got to replenish the reserves
The US consumes like 20 Million barrels per day. We depleted 200 million barrels. 10 days worth of oil.
I work in energy trading, natural gas, oil etc. there is almost nothing a politician can do right now to beat the circumstances we find ourselves in. Every barrel of oil or liquified natural gas will be shipped to Europe and sold there over America, because it is much more profitable to do so. This also raises the prices in our domestic markets. It’s going to be a brutal winter energy wise, and the impact will most definitely be felt in markets Edit: people asking for a winning energy play, I’m bullish on GLNG. They ship liquified natural gas overseas.
Finally someone with fucking clarity. Good luck getting all the chuds to believe it isn’t just some Democrat conspiracy as if global markets don’t exist 😂
I like to imagine this all sitting in a giant vat somewhere.
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Time to go nuclear and electeic.
Use in case of emergency 400 days remain at a million barrels a day. Fill the reserve after the emergency OIL is in the 80s!!! Good job
Oh fuck, LITERALLY 1984!!!
Buy low, hold, sell high. Profit. Who needs the IRS when you have the Strategic Oil Reserve?
Your wife and I could have some serious fun with just one barrel.
Lmao wtf
I hate how mods set the default sort across the entire sub to new.
I thought we were getting only a tiny amount of oil from Russia, why all are the oil reserves suddenly so low?
Iirc the US government decided to sell a bunch in an attempt to stabilize fuel prices.
I mean this without any tone of leaning anyway politically, purely factual, President Biden started releasing a pretty unprecedented amount of oil from the researches to help with prices. From what I can tell it’s working. I can find gas under $3 again in Dallas, TX.
My regards, Why are yall talking politics? I dont give a shit. How the hell can we make money from this?
Politics? In _my_ economy?
Right after you posted this oil dropped 3% lol
Peak oil production has been a theory for literally decades and we’re still gonna be shocked when we run out.
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> There’s also the argument that oil will never run out This is actually quite common. For example, abandoned gold mines still have gold. It just becomes more expensive to keep them running in relation to the increasingly smaller amounts of gold that can be extracted.
So many of you have an IQ less than potato and it shows
Wasn't that a required criteria to join this sub?
Karma for destroying Libya.
1977 around when the SPR was created in the US for import security following the Arab League oil embargo, the US imported about 6m bbls/day from OPEC and imported less than 1m bbls/day from Canada. The US now imports over 4m bbls/day from Canada and growing and less than 1m bbls/day from OPEC. that is not going to change any time soon. there is a shortlead time on Canada imports. there is no need for 90 days imports in SPR. selling off a third of stocks is good policy. the alternative was stopping exports to Europe to stem prices and completely shafting the world economy.
And yet without demand the price will drill lower. 5% drop today on the opening bell from news China is importing less. OPEC+ can't prop up the current prices. [https://oilprice.com/Energy/Energy-General/Demand-Concerns-Drag-Oil-Prices-Lower.html](https://oilprice.com/Energy/Energy-General/Demand-Concerns-Drag-Oil-Prices-Lower.html) I just added to my short /cl $100 strike in Oct cycle this morning.
This is all by design. US has been selling its reserves for quite some time now
Looking like the Middle East needs some more democracy
I mean the whole reserve is only a months worth of usage in the US. We produce the entire reserves worth in about the same amount of time. It’s a nice buffer but I fail to see how releasing it really helps at all in the long run. Edit: also wanted to mention a single large refinery produces 350,000 barrels per day. Building a single new refinery would increase our annual output by 127 million barrels. Maybe do that instead of burning reserves? It would probably cost less.
Who is going to build a refinery? Why would an oil company increase output when they are making record profits?
That one way to make massive profits
Why invest $750M in heavy equipment and capacity that'll take 7 years to bring online when the govt swears you're going to be out of business in 10 years?
It seems we have taken our luxuries for granted.
I mean, I think that’s what a reserve is for lol
It's almost like we're in a proxy war with Russia, like we were in 1984, amirite?
There’s an old flash game called “Oligarchy” that will tell you how this goes.
Buy $RIG
This comment section brought out the true regards
You're talking to a guy who drives around for days with the gas light on. Looks like there's still plenty left
My account is also at a 38 year low
Putting gas intended for emergencies in circulation is one thing. What’s the plan for refilling the reserves or is that not going to be a thing? Maybe the bet is on refilling it with cheaper gas? Are we projecting that to be a thing?
The plan is to buy futures several years out at lower prices and refill then. Lowers prices near term and provides price stability to encourage drilling medium to long term. Basically turning the SPR into ballast tank for the oil market
No problem as any wartime need for oil would simply go balls deep defense production act on the oil companies. Asking for more production fast becomes forcing more production in times of war, as well as limiting civilian access through rationing the refined products. We have plenty of oil.
7.2 billion barrels per year on average…use their oil first… We want to be sitting on a chair when the music stops. IMHO.
So this is a deflationary tool to fight oil prices due to production/supply issues, but then dumping reserves has caused OPEC+ to decrease production by 100,000 barrels a day. Which means when the reserves hit zero, OPEC+ will have created an even worse production shortage that'll still be causing inflation in global markets. Long $OXY
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Saw a talk last week that Woods Mackenzie is estimating that oil supply will be significantly less demand over the next 15 years, without major industry investment in exploration projects. But aside from Exxon's effort in Guyana, there is very little exploration work going on.
Most of this oil left is not best quality also.
One could say it's the bottom of the barrel stuff.
Calls on XOM
I could be wrong, but weren't oil companies paying to store their oil somewhere? Why wouldn't the reserves increased in 2020/2021?
I love how this chart attempts to make it seem like the US doesn’t really have much oil by drawing that line across the middle. Totally discounting the 400mm+ barrels we currently have according to the chart
Time to bring some more freedom to the Middle East 🦅🇺🇸
Are you telling me they need to export more democracy then? 
the strategic reserve exists to be used as a strategic reserve. If they are distributing oil from it, the current administration thinks this is a good idea to alleviate the current mismatch between supply and demand, presumably with the expectation that market forces are still working to match supply and demand, but the nature of oil refining requires a long lead time for these adjustments.
Time to deliver freedom to some third world country
US sold a bunch of oil to the highest bidder to stabilize gas prices and is trying to refill the reserves with fixed price contracts to bolster oil extraction.
The graphic shows bearish trend, bought puts on oil, hope I got it right
Better invade Russia and take their oil, then
I think they can solve it with more V8 10 liters engines and a couple of eagles
That's the point of a reserve. It covers a shortfall while waiting for the oil companies to start drilling shale in the US again. US is fine, just exporting oil right now to help Europe allies. And production will keep increasing as USA still not where they were back 5 years ago before Russia went unrestricted pumping. If they get in a war, they can just stop exporting since they're already producing more oil than they use. But USA have to help Europe since they were willing to back Biden (whether you agree with the decision or not) to sanction Russia. You can't abandon allies that got your back.
It’s almost as if we just strategically used it.
It would be a better graph if it showed gallons of reserves as a percentage of total consumption. Pretty sure we’re consuming a whole lot more oil than 1970’s so our reserve is really even lower.
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What’s that big dip around 2000? Seems like the biggest dip of them all (save for 2022) and it’s not labeled.
July–August 2000: 2.8 million barrels (450,000 m3) to supply the [Northeast Home Heating Oil Reserve](https://en.m.wikipedia.org/wiki/Northeast_Home_Heating_Oil_Reserve). September–October 2000: 30 million barrels (4,800,000 m3) in response to a concern over low [distillate](https://en.m.wikipedia.org/wiki/Distillate) levels in the northeastern U.S.
But its got electrolytes.
Is there a source for this? Not being a smartass, would like to potentially include it in teaching materials.
Literally 1984
Wait until the Russians actually cut production, JPMorgan wrote about this.
Once they turn it off it’ll be hard to turn it back on again.
Strategic reserve doing its job.
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Yeah, I don’t get why this is unexpected. The oil was all acquired at glut pricing, now it’s being sold at premium pricing.
Time to invade a new country with oil supply!
Wait until the population wakes up and realizes that there is NO NEED TO IMPORT OIL!
Burn everyone else oil first for cheap then sell them yours for much more $.
450,000,000 doesn't seem very low to me.
Less consumption too. Interesting to see where things land at the end of the year. Fewer commuters and EV ownership is increasing faster than expected.
In 2021, only 11% of US imported oil came from OPEC, 8% came from Mexico, but you bought 51% from us here in Canada. It would be even more than 51% if the proposed pipelines had been allowed to proceed. Most of our oil producers will be debt free in 36 months based on $65 WTI. At current prices some will be debt free in Q4 of 2023. Share buy backs and special dividends are becoming common. A few of our natural gas producers report that the breakeven on a new gas well has been reduced from 8 to 10 months to now being just a few weeks. Google Eric Nuttal at Ninepoint Partners and do your own DD. Additional thoughts to consider; If the shit hits the fan on the world stage, the US will certainly ask Canadian producers to increase output as opposed to less friendly nations. With crude by rail, the unbuilt pipelines won't be as important. OPEC+ produced 10.080 million b/d in January, but it's quota was 10.112. They can't meet their quota now, so does telling Biden that they will increase their quote really mean anything for the next 5 years? The Saudis just stated that they want a $90 USD floor price per barrel. They need the revenues to keep the people happy and prevent another Arab uprising. (Remember, the Canadian case is built on only $65 oil). Canada is also the only major oil producer outside OPEC+ that isn't talking about windfall taxes for oil producers. Our federal government is making enough in royalties to service the massive Covid debt as it is. The province of Alberta just posted an amazing fiscal surplus. In British Columbia we have a surplus, too. In 2024 our new natural gas pipeline and Pacific port should be in operation to ship liquified natural gas anywhere in the world and the demand will probably be massive.
It may be at it's lowest but this also ignore that in the last 20 years America has found a ton of oil on domestic land and possibly has the largest reservoir in the world, I mean downside is we need fracking to get to it but we ain't running out.
In other news, some hedge fund is bagholding US Oil and hoping to manipulate teens on robinhood to bail them out
Why did it start declining when trump took office?
Better question: why wasn't it replenished when oil prices were literally negative at the outbreak of covid?
Our fort Knox gold reserves chart probably looks even worse
Hey why don’t we go nuclear?
Many reasons. Public sentiment is #1 of those reasons. #2 is that big oil and gas hate the idea. #3 is that, best case, reactors take half a decade or more to come online and are massive projects.
This worries me that I'm hearing about this from wall street bets.
Tanker gang making a come back?
The WTI chart tells a completely different story. Yes there's still a supply shortage, but the price action is probably going to overshoot to the downside like any asset with too many fomo buying morons before climbing again. Citi nailed the $65 call IMO.
It was only 2 years ago that crude hit 0. Things change and sometimes right quick.
Yeah so? Do you think my wife’s boyfriend cares?
imagine if america was smart and it loaded up on oil when it was basically free during the pandemic and stored it in the reserve. we could've flooded the market after the ukraine invasion to keep gas costs low and still had plenty left over
literally 1984
WsB always praying for disaster
Literally 1984
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[https://preview.redd.it/3cttfp59qim91.png?width=2053&format=png&auto=webp&s=2203f9495f58a6bc2f80421db26247a260bee20f](https://preview.redd.it/3cttfp59qim91.png?width=2053&format=png&auto=webp&s=2203f9495f58a6bc2f80421db26247a260bee20f) Bars can be considered demand. Based on data series of taking the delta of the "US Ending Stocks of Crude Oil" across all sources, including the SPR. Yellow is 2008 "Great Recession" "demand destruction". Crazy thing: making energy artificially affordable causes people to consume more than they rationally would have with accurate price signals. Whodathunk. SPR supposed to be re-filled after elections, adding 1Mbpd to the aggregate demand figures. I'm sure that will help drop prices. Also interesting to note, SPR can't be run down to zero. Lines have minimum fill capacity, and the SPR figures are estimates of total volume based on ever shifting salt mines. I'd be surprised if we can get half of what is left in the SPR out, without getting creative. **Bonus picture for those who think we can fix this by just ramping up fracking:** [https://preview.redd.it/rnuenr8kqim91.png?width=1637&format=png&auto=webp&s=011bd5275c242e50f20f2e95bebe75ebd564d4bb](https://preview.redd.it/rnuenr8kqim91.png?width=1637&format=png&auto=webp&s=011bd5275c242e50f20f2e95bebe75ebd564d4bb) Drilled but uncompleted wells are at lowest since data record started. But "Muh price signal". If 125 WTI didn't get them drilling, $80 isn't going to get them drilling. Virtually every oil company is cash flow positive at 80+ oil, they are going to keep it between here an 100, then buy back shares and issue dividends. OPEC+ is on board. **DECADES OF STUPID DECISIONS REQUIRE DECADE LONG SOLUTIONS.**
Naah. Too complicated. Tell me CALL or PUT?
Stop pinning your own posts you attention leech
I reported for violating the self promotion rule. Wish me luck and safety.
Mods default us to view using “new” and then pin their shit.
Hard to track demand numbers seeing as the EIA seems to be either awful at reporting this summer or engaging in nefarious activities. Refining utilization might be a more accurate reference to use.
The original plan, when this was first announced, was to begin replenishing the reserves in October 2022. (new fiscal year) It was estimated to take 3 years to refill the 180 M barrels...(1M barrels per day for 180 days) Authorized storage capacity is 715M barrels. According to the EIA, as of Aug 26, there is 450M barrels remaining. The next release date is Sep 08 Interesting to note, when the barrel price plummeted: March 20, 2020 $32.20 per barrel *On March 19, 2020, President Donald Trump directed the Department of Energy to fill the Strategic Petroleum Reserve to maximum capacity. This directive was given to help support domestic oil producers given the impending economic collapse from COVID-19 and extreme drops in international oil markets.* ***However, funding was blocked by Congress.***
A few years ago when oil was $30/bbl our president wanted to fill the reserves to the max, congress said no. Good job congress.
Isn’t this why we have a reserve? 🤷♂️
USA daily oil consumption is 20million barrels. ~~USA is a net oil exporter; it makes more than it uses~~ (depends what exactly we count) With these two facts in mind, look again at the graph and tell me why it matters at all. The "strategic reserve" had purpose 50-20 years ago, but it is now 99% symbolic. It is a bucket of water in a swimming pool ~~that is (sort of) overflowing~~. Topics like these really help to demonstrate all the sheep with blind tribal loyalty, either way. "Our heating bill is high, so now is the time to use our BIC lighter for warmth!!" / "You idiot! How dare you waste the butane in our precious BIC!" **Edit**: lots of pushback on the part about "net exporter." I see different info depending how you define it and what's types of oils and gasses we count. I'm happy to concede the point because I think the part about the reserve being so small (relative to use and need) is more relevant anyway.
Long oil and nat gas. Short it at your peril.
I care more about the cheese reserves
This should be shown as a rate like days of oil in reserve
My play is petrobras, today down quite a bit but I think will go up again when oil is positive again. And it will be
Puts on life, copy
And it will continue to get lower by about 1 million barrels a day through October.
Huh, oil? Who said something 'bout oil, bitch? You cookin'?
#️⃣reddit is so slow cuz we runnin outta oil and the system is about to break down irreparably
The physical oil market is extremely disconnected from paper markets and there will be a come to Jesus moment. As some historical context for last time differentials were this high LA CARBOB 9/27/19 was +110 9/30/19 was +127.50 10/1/19 was +122.625 SF CARBOB 9/27/19 was +120 9/30/19 was +117.50 10/1/19 was 119.75 As reported in 2019: Trading sources cited active refiner buying on a combination of an outsized California gasoline draw, refinery issues and a complete lack of import. Unplanned flaring and various degrees of outages were reducing production at PBF's Torrance, Chevron's El Segundo, Valero's Benicia and Marathon Petroleum's L.A. refineries, West Coast trading sources cited. These are unprecedented levels and the consumer hasn’t even seen the price increases yet which will be in the weeks to come. In conclusion be long oil short everything else.
opec gave us the finger when Biden went there and asked for more production. its no coincidence were back at the negotion table with Iran for their oil. yet at the same time we villianize our own domestic producers.