Breaking news out of D.C. right now where the White House just announced that the Department of Energy will release up to 50 million barrels of oil from the Strategic Petroleum Reserve:
In response to the highest oil prices in 7 years, the Biden Administration takes decisive action to address lack of supply to lower prices for Americans at the pump: https://t.co/yMAxoAAnLC
— U.S. Department of Energy (@ENERGY) November 23, 2021
And the White House wants oil companies to “pass savings on to consumers as quickly as possible”:
Senior administration official on the SPR release: “We expect the industry to pass savings on to consumers as quickly as possible.”
— Matt Egan (@MattEganCNN) November 23, 2021
Um, what savings? The price of oil barely moved on the news:
US oil prices drop 1.3% to $75.70 a barrel after Biden administration announces SPR release in tandem with releases from other major consuming nations. https://t.co/cBUwKz7rPB
— Matt Egan (@MattEganCNN) November 23, 2021
That’s probably because the “release” is really an exchange and 32 million of the 50 million barrels will need to be returned to the SPR by oil companies at a later date. From the DOE:
Companies interested in receiving crude oil through the exchange must submit bids no later than 10:00 a.m. Central Time, December 6, 2021, and contracts will be awarded to successful offerors no later than December 14, 2021. Deliveries will take place January through April 2022, with early deliveries accepted in late December.
Exchange crude oil will be returned to the SPR in calendar years 2022, 2023, and 2024. A Notice of Sale for up to 18 million barrels of SPR crude oil will be announced no sooner than December 17, 2021.
This is one, gigantic nothing-burger says hedge fund manager Kyle Bass:
If anyone took the time to review US SPR data, the administration has been selling many millions of barrels each month for the last 90 days. And for context, the globe consumes 100 million PER DAY. A coordinated release of 50 million is nothing at all. Rounding error.#panic
— 🇺🇸Kyle Bass🇺🇸 (@Jkylebass) November 23, 2021
Even worse? The White House has no understanding of energy markets:
Get ready for explosively higher oil. 7 years of dramatic underinvestment in hydrocarbons fueled by ignorance like this will inevitably generate $100+ crude oil and $5+ prices at the pump for years to come.We all would love to see an overnight transition to alternative energy 1/3 https://t.co/fwJkRZzgQs
— 🇺🇸Kyle Bass🇺🇸 (@Jkylebass) November 23, 2021
Gulp:
But it’s this kind of childish thinking that will compromise US National Security and harm the poor and underserved. A coordinated SPR release is a quick shot of morphine for a major infection. It fixes nothing and is evidence of a panic 😱 in DC. Prepare for $100 now..#GasPrice
— 🇺🇸Kyle Bass🇺🇸 (@Jkylebass) November 23, 2021
Javier Blas, Chief Energy Correspondent at Bloomberg News, added that, “No amount of SPR oil releases will resolve the biggest energy crunch currently affecting the global economy: natural gas and electricity”:
No amount of SPR oil releases will resolve the biggest energy crunch currently affecting the global economy: natural gas and electricity (and neither will resolve the root of the problem) | #OOTT
— Javier Blas (@JavierBlas) November 22, 2021
Former President Trump also called out President Biden for the move:
Of course, Dems are giant hypocrites on all this. Sen. Chuck Schumer is cheering the release:
Schumer: President Biden’s announcement is good news for American families and will strengthen our economy. Tapping the SPR will provide much-needed temporary relief at the pump & will signal to OPEC that they cannot recklessly manipulate supply to artificially inflate gas prices
— Chad Pergram (@ChadPergram) November 23, 2021
But during the oil freefall during Covid, he called Trump’s move to fill up the SPR a “bailout for big oil”:
Reminder: When oil prices were in free-fall last year the Trump admin wanted to "fill up" the SPR. Senator Schumer called it a "bailout for big oil." Imagine today it feels like a missed buying opportunity… https://t.co/eTnAbfM3Pg @scunningha @AriNatter @jendlouhyhc
— annmarie hordern (@annmarie) November 22, 2021
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