Posted on Thursday, 30th June 2011 by James Martin
The sudden announcement last week that the International Energy Agency (IEA) would release strategic oil supplies onto the world markets caused a significant selloff. And crude oil prices dropped around $9 in about two days.
Mission accomplished? Hardly!
The 60 million barrel release from the Strategic Petroleum Reserve (SPR) is merely a drop in the bucket of global usage, and will likely have the opposite effect on prices longer term. The move is simply more psychological window dressing for the comic theater that is happening in Washington right now. It would be funny, if it wasn’t so sad.
In fact, it’s really a sign of …
Desperate Measures
By releasing supplies from the SPR with crude at around $90, if prices do run up again, the administration will have to fill the SPR back up at a higher price. And as shown in the chart below, a big chunk of that oil will come from outside our borders.
The Strategic Petroleum Reserve is intended solely for emergencies that threaten the U.S. econo Read more…
Tags: Oil Prices, Prices
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