Will Obama tap the Strategic Petroleum Reserve before November? #rsrh

White House could have ‘defensible pretext’ to tap SPR soon: analysts

“A drawdown of the US emergency oil stockpile is looking increasingly likely as economic and political pressures converge to enable the Obama administration to justify a release, analysts said Friday.

“But if the White House does decide to proceed with a sale from the Strategic Petroleum Reserve, volumes are unlikely to be anywhere near the 180 million barrels suggested in some media reports, they added.

" ‘The Obama administration can cite a number of reasons to go forward with an SPR release, which is why we conclude that action on this front is likely,’Washington-based PFC Energy said.

“Gasoline prices of close to $4/gal in some US cities within three months of the November presidential election provides motivation for a release, although this might be difficult to justify to a cynical public, PFC said.

" ‘As a fig leaf, the president could cite the near 1.5 million b/d of disruptions to global crude oil production this year,’ PFC said. ‘He could also point to the geographical mismatch between America’s rising crude producing regions and those where refined products are needed, citing the need for the government to temporarily bridge the gap.’ “

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2 Responses to Will Obama tap the Strategic Petroleum Reserve before November? #rsrh

  1. citizenkla says:

    I don’t see that as being a positive pre-election. Bids have to be received and awarded then shipments scheduled. This would not affect price at the pump before Nov.

  2. Mija "acat" Cat says:

    The two questions are whether the sale will have a psychological effect .. i.e. will it cause futures prices to trend lower, which will affect the price at the pump, and whether the psychological effect is already baked in, i.e. this cat and others fully expect Obama to try this .. so if the futures traders already expect it, prices at the pump won’t budge.

    My guess is all the chatter about it has led to a “baking in”, so unless Obama *exceeds* the amount expected significantly (or falls short significantly) the result will be a nothingburger.

    Mew

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