Tom Williams
President Joe Biden is releasing 50 million barrels (about 8% of the total) of Oil from the nation’s emergency stockpile to lower energy costs amid a spike in gas prices and soaring inflation, the White House announced. This was in tandem with releases from other major consuming nations.
The Strategic Petroleum Reserve (SPR) is a US Government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts. See here the current inventory.
See here the announcement on CNBC below.
BREAKING: White House announces it will release oil from strategic reserve in an effort to combat rising gas prices@YlanMui reports: pic.twitter.com/N2QSzv1fQg
— Squawk Box (@SquawkCNBC) November 23, 2021
For context, the globe consumes 100 million barrels of Oil PER DAY. The US uses about 20 million barrels of oil PER DAY. So this SPR release is a mere drop in the barrel, though now the SPR is now the lowest it has been since 2003. See below the historical view of the SPR – see more here.
For the most part, this SPR release was telegraphed into the global markets already. Goldman for one: “A Biden SPR Release Is Now Fully Priced In And Will Send Oil Price Even Higher In 2022.” This was the traditional – buy on the rumor and sells on the fact, though in the inverse.
From a technical analysis perspective, Oil (WTI) has already broken resistance at the $78 level. After a minor test of this break-point, it is on its way to the old highs at $110. After backing off the resistance at the $110 level, and if the inflation story continues, a break to new all-time highs could occur. After this, the sky could be the limit.
This feeble attempt by the Biden administration to control Oil prices is failing. Higher Oil prices will foster even more inflation as it bleeds into all aspects of the economy. The dirty not-so-secret is that the Biden ilk wants higher Oil prices to justify their climate change initiatives – and the need for his never-ending stimulus programs – something that has been in the works for a long time.
What could go wrong?
The Right Wire Report does not provide investment advice. This post is for information only and is not a solicitation for you to buy or sell any financial asset.
See more #chartoftheday posts.
If you found this article informative, please consider a small donation to our coffee cup to help support Conservative Journalism – or spread the word. Thank you.
RWR original article syndication source.
Am I understanding this right, 50 million barrels will last 2.5 days? What’s the point? It’s a calculated political move that will likely have no benefit to Americans. Biden is a douche bag.