heard about this on the radio yesterday and the first thing that popped into my head was:
"That is such a mistake right now."
DISCERNMENT ALERT
My thinking was A) It's not gonna make that much difference B) Were gonna need it more later than we do now. C) If the war in Ukraine is going to be over so quick like all the prognosticators are saying (except me and a few others) then why release 1,000,000 barrels a day for the next six months? and D) What happens at the end of the six months when the situation is worse than it is now? Then what?
That all went through my head upon hearing the announcement and not reading a thing about it until today
Oil prices slide as Biden announces largest-ever Strategic Petroleum Reserve release
“The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up,” the administration said in a statement.
"serve as a bridge till the end of the year..."
Yeah...okay...right. See the comment a lil farther down in this piece.
"Gasoline prices have surged to record highs on Russia’s invasion of Ukraine and subsequent supply concerns, driving spikes in inflation across the global economy."
(Well I wonder why on earth he ever invaded?)
"In a research note Thursday, Goldman Sachs commodity analysts said the release from U.S. reserves would help the oil market toward rebalancing in 2022, but would not resolve its structural deficit.
“This would reduce the amount of necessary price-induced demand destruction, the sole oil rebalancing mechanism currently available in a world devoid of inventory buffers and supply elasticity,” Goldman Sachs said.
“This would remain, however, a release of oil inventories, not a persistent source of supply for coming years. Such a release would therefore not resolve the structural supply deficit, years in the making.”
"Ed Bell, senior director of market economics at Emirates NBD, told CNBC on Thursday that despite the record scale of the expected SPR release, an enormous downswing in its immediate aftermath would be unlikely.
“Markets are still going to be very much squarely focused on supply going forward and the lack of it that we’re going to be seeing from Russia, the incremental additions we’re going to be seeing from OPEC+ and so far the real lack of price response from U.S. producers to high prices,” Bell told CNBC’s “Capital Connection.”
“For the longer term though, I do think this is a bit of a risky strategy for the U.S. to draw down on its SPR so heavily if you think that we’re going to be going into the more heavy use summer months in the United States, we’re going to be drawing down inventories just as we’re going to be needing them in a time of uncertain supply conditions.”
(Summer months? Summer months? Are you kidding me? What about when your military needs to access the SPR and it's not here? Then what?)
This is exactly what the war in Ukraine is all about. It really is. Breaking the West back with inflation and rising food and energy prices, as well as some other things, a buffer zone against future invasion, partial restoration of the Soviet Union ect.
Euro Zone Inflation Hits Another Record High of 7.5% as Russia-Ukraine War Pushes Up Energy Prices
"European Central Bank President Christine Lagarde said earlier this week that "three main factors are likely to take inflation higher" going forward."
"She said "energy prices are expected to stay higher for longer," "pressure on food inflation is likely to increase," and "global manufacturing bottlenecks are likely to persist in certain sectors."
"This economic backdrop is leading consumers to be more pessimistic about their prospects going forward, too. "Households are becoming more pessimistic and could cut back on spending," Lagarde said in a speech in Cyprus on Wednesday."
"Households are becoming more pessimistic and could cut back on spending,"
(That's what were gonna be worried about right now? Consumer spending? Seriously? I'd accept Christ and get my heart right if I was you, I really would, right now, today, not a second longer)
"Lower spending could bring even further economic headaches, as businesses would be selling less, have less room to pay employees and would be less likely to invest."
(That was kinda the long game to start with yo...)
My barber buddy had a great question, "Well how much do we have in the SPR? (Strategic Petroleum Reserve).
"It is the largest known emergency supply in the world, and its underground tanks in Louisiana and Texas have capacity for 714 million barrels"
Strategic Petroleum Reserve (United States)
The world uses about 97 million barrels a day, so how much difference is it really going to make? One 97th?
If you can't tell by now that there are no more good options left on the table? Chances are you won't ever understand there are no good options left on the table. (Just think about interest rates and 2.5 % crashes the housing market (already showing signs BTW) and at 4.5% we will default on the INTEREST payment on the national debt etc). And this is still just the beginning. It was the most jarring news to me I had heard in a long time. This is over 3.5x the next largest SPR drawdown in it's history. It's like burning a pile of cash to stay warm for a few minutes which could very well be here in the near future as well.
4-7 years to replace it is (SPR drawdown) what the oil people are saying, (Industry analysist on the radio yesterday) and were gonna blow through it in six months and its not going to make a hill of beans bit of difference. It's kinda like the corner we backed ourselves into with interest rates, only different :-).
"Two riders were approaching
and the wind began to howl..."
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