Biden releases a portion of the Strategic Oil Reserve...

[Hobo Hilton]

Appears OPEC is calling Biden's bluff..........
____________________________________

Top oil producers Saudi Arabia and Russia are considering pausing their planned efforts to ramp up oil production, according to The Wall Street Journal, after the U.S. and other energy-consuming countries said they would tap their national strategic petroleum reserves in an attempt to bring down gasoline prices.

OPEC considers pausing oil production increase after Biden releases more crude

Top oil producers Saudi Arabia and Russia are considering pausing their planned efforts to ramp up oil production, according to The Wall Street Journal, after the U.S. and other energy-consuming countries said they would tap their national strategic petroleum reserves in an attempt to bring down...

www.foxbusiness.com

 

[Kein Mitleid]

They need the high prices to recover losses, what uncle Joe demands isn’t going to rate highly for them.

I guess our only recourse is to produce more…

 

[Hobo Hilton]

They need the high prices to recover losses, what uncle Joe demands isn’t going to rate highly for them.

I guess our only recourse is to produce more…

The first thing "We the People" must do is to define the enemy.... Next move is to stop sending American resources (oil, food, technology, weapons, etc) to the enemies.... When a country realizes it has dug itself into a hole, the first thing to do is to stop digging.

 

[pmclaine]

The first thing "We the People" must do is to define the enemy.... Next move is to stop sending American resources (oil, food, technology, weapons, etc) to the enemies.... When a country realizes it has dug itself into a hole, the first thing to do is to stop digging.

Washington D.C.

 

[AngryKoala]

COCK FIGHT!!!!!

 

[UKDslayer]

I listened to the nauseating press conference - they are releasing 19B gallons. We use 11B a day. So yeah, there's that.

 

[Dunraven]

Notice there was nothing released from the strategic wind and solar reserve?

 

[Scrumbag]

I suppose now isn't the time to point out that now would be a really good time to help Canadian producers out than say rather than screwing them over with Gates-Buffet owned rail tankers, let them get a pipeline built to the US?

 

[Hobo Hilton]

I suppose now isn't the time to point out that now would be a really good time to help Canadian producers out than say rather than screwing them over with Gates-Buffet owned rail tankers, let them get a pipeline built to the US?

Our Founding Father's knew the success or failure of America depended on "commerce".... Seems our leaders have totally forgotten that once commerce is established, it must be nurtured... Just like a garden.... The "Garden of Commerce" in America is failing terribly.... JMHO

 

[Mr.BR]

For everyone who is getting panties wet over SPR oil release and/or orange man bad genius 4d chess moves.

Just some perspective US ,China ,India ,Japan UK etc. combined SPR draw will be 80 mio barrels over time, world consumption of oil is at cca 100mio per day, so SPR release hardly makes a dent particularly because the markets were factoring it into the prices well in advance , and pricing was for over 100mio barrels so ,SPR draw is actually falling short of market pricing . Like GreenGo Juan suggested folks don't get it that SPR was never designed to be an oil price dumping tool and as such is hardly effective. The only tool to really dump the prices is pumping more.


Also, note that drawdown seems to have been ongoing well before anyone declared it as a major policy decision or before they convinced anyone else to release their SPR

''It turns out that the US SPR has seen drawdowns for 10 straight weeks, during which more than 15 million barrels of crude have been withdrawn.
It is clear that the much talked-about SPR draw is happening by stealth, despite U.S. House Majority Leader Steny Hoyer saying he is not in agreement with Senate Majority Leader Chuck Schumer's call for tapping the strategic oil reserve to lower gas prices, saying he believed the reserve was there to be used if there is a collapse in supply in times of emergency.

 

[GreenGO Juan]

If I'm not mistaken I heard it's only enough to run the country for about 2.5 days. Is that true?

Also isn't this for war time and real emergencies not because he fucked up?

Yeah its not that big of a deal, referring to what is being discussed as being pulled from the reserve. Funny I’m staying at my dads house for Thanksgiving and still here as we’ve got family in town. I discussed this topic coming up, told him what people are saying and he laughed his ass off.

I’m not sure exactly how long it would run the country but yeah I would only be a few days. I believe the full capacity of the strategic reserve is around 750 million barrels. If they pulled this amount out I’d be hovering around 650 million. ( I didn’t research these numbers but they’re close )

Plus right now production in the America’s is starting it gear back up, as the price is high enough to support US production and be profitable.

Currently most of the fuel the US is using is produced in the Americas.

Yes. But the reserve was created back in the 70s after the fuel scares when we were directly Reliant Middle East oil. That strategic balance has changed and the importance of the reserve has lessened.

 

[Alphatreedog]

I did not read any of this and .
It will take a month from reception to refining to produce replacement . This is what pisses me off . OdickBag dumped our reserves along with the big three producers to cripple small domestic producers . They caused oil to crash and fucked the Saudis etc just so they could buy claims for pennies on the dollar .
Trump rebuilt the reserves . Commies dumping it again .
If we get in a shooting war with contested access to ME and zero domestic refinery flow we are fucked SQAURED .

 

[Alphatreedog]

Oh and we have not built any new refineries . We have closed some though .
North Jersey , Philly and Texas . If any were to be taken out in a war , again we are fucked .

 

[buffalowinter]

 

[thejeep]

Biden releases portion of the strategic oil reserve………….. in his pants.

 

[GreenGO Juan]

And after this move... the price of everything besides natural gas has decreased.

This will be a buffer as US production gears up and in the next few months it will stabilize after the shock from the Rona shut down.

Hate Biden all you want, but this was actually a smart move IMO.

The fear mongers about selling from the reserve is... chicken little noise. The sky is falling the sky is falling Ahhhhhh. Lol

 

[SilentStalkr]

View attachment 7749303
And after this move... the price of everything besides natural gas has decreased.

This will be a buffer as US production gears up and in the next few months it will stabilize after the shock from the Rona shut down.

Hate Biden all you want, but this was actually a smart move IMO.

The fear mongers about selling from the reserve is... chicken little noise. The sky is falling the sky is falling Ahhhhhh. Lol

Um, isn’t the rona heating back up? I know the fear mongerinh certainly is.

 

[Mr.BR]

Wonder how long the effect will last as the quantity released is not huge relative to worldwide consumption.

 

[Hobo Hilton]

View attachment 7749303
And after this move... the price of everything besides natural gas has decreased.

This will be a buffer as US production gears up and in the next few months it will stabilize after the shock from the Rona shut down.

Hate Biden all you want, but this was actually a smart move IMO.

The fear mongers about selling from the reserve is... chicken little noise. The sky is falling the sky is falling Ahhhhhh. Lol

It is one of the dumbest moves this administration has made........
The message from the other oil producing countries is basically a "Game of Chicken"....... They are saying "How low do you want to drive down the price of oil?"..... I remember the gasoline wars, long ago, in Houston.... Gasoline was down to 23 cents / gallon.... It was selling cheaper than the refiners could produce it.

A question for the members in the oil refining industry - "How long would you stay in business with oil at $10 / barrel ?
______________
Edit:

Crude Oil Cost​

Crude oil is produced worldwide from various locations, such as tradition oil wells, deep-sea (ocean) wells, oil shale fracturing, and Canadian tar sands. The cost to produce a barrel varies from about $20 per barrel in Saudi Arabia’s desserts to $90 per barrel for some deep-water wells.

What Determines Retail Prices for Gasoline and Diesel? | Volta Oil, MA RI CT

There are four cost components that make up the retail price of gasoline and diesel. Those components include: crude oil cost, refining cost, distribution and marketing cost, and tax cost.

voltaoil.com

 

[Charger442]

Wonder how long the effect will last as the quantity released is not huge relative to worldwide consumption.

What if it has no effect on oil futures? What if it's something else that's driving it down? Like the stock market taking a 2.5% dive on Friday?

 

[Rthur]

One has to ask oneself if they didn't know the first actions would lead to doubling
the price of gas.
Then one can decide if this action is really about helping the consumer.

R

 

[Mr.BR]

What if it has no effect on oil futures? What if it's something else that's driving it down? Like the stock market taking a 2.5% dive on Friday?

Considering the drawdown on the first 14 or so million barrels before it was announced, had little to no effect, Omicron Covid variant might be the cause. Its not like markets are driven by sound fundamentals.

Omicron turning out to be a mild variant one tweet later , market fundamentals in action

And then there is this:

A new Department of the Interior (DOI) report on oil and gas leasing in federal lands and waters advises the DOI’s Bureau of Land Management (BLM) to raise royalties, rental rates, and other fees on oil and gas companies but has not moved to halt new leasing entirely.
The DOI report claimed the U.S. oil and gas leasing program “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”

In addition to recommending higher onshore and offshore drilling fees, new screening procedures for bidders, and a “Fitness to Operate” standard for prospective offshore operators, the report states that the DOI’s Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) would “study the most appropriate method” to develop and apply pricing for methane, carbon dioxide, and nitrous oxide for offshore operators.

 

[GreenGO Juan]

It is one of the dumbest moves this administration has made........
The message from the other oil producing countries is basically a "Game of Chicken"....... They are saying "How low do you want to drive down the price of oil?"..... I remember the gasoline wars, long ago, in Houston.... Gasoline was down to 23 cents / gallon.... It was selling cheaper than the refiners could produce it.

A question for the members in the oil refining industry - "How long would you stay in business with oil at $10 / barrel ?
______________
Edit:

Crude Oil Cost​

Crude oil is produced worldwide from various locations, such as tradition oil wells, deep-sea (ocean) wells, oil shale fracturing, and Canadian tar sands. The cost to produce a barrel varies from about $20 per barrel in Saudi Arabia’s desserts to $90 per barrel for some deep-water wells.

What Determines Retail Prices for Gasoline and Diesel? | Volta Oil, MA RI CT

There are four cost components that make up the retail price of gasoline and diesel. Those components include: crude oil cost, refining cost, distribution and marketing cost, and tax cost.

voltaoil.com

This “game of chicken “ has been going n for years. The difference being the US has a stronger hand( we moved up to a bulldozer instead of a compact car)at this point in history than ever before.

Note the production and export lines. We can affect the price of petroleum like never before and should. Most of our oil imports come from Canada. We have mostly moved away from middle east oil. Imo that is a good thing, it keeps us from having to fight wars over our fuel supply lines or pissing off people who hijack airlines and fly them into buildings.

Everyone is entitled to their opinions. I fucking hate Biden, but We are in this shit show together. Imo this was a good move obviously others disagree, which does not surprise me. There is a balance between affordable petroleum and petroleum industry profits, and yes its a bit like a game of chicken.

Back to the Strategic Reserve. Because of our change in import sources, mainly Canada and Mexico which account for 70% of crude imports. The strategic reserve is not as important as it was when it was created. Unless we go to war with Canada... who we get 60% of our crude and 52% of total petroleum imports. War with Canada is not likely. So with the exception of war with Canada we’re good, and that reserve is not as important as when we imported much of our oil from the middle east.

Remember Biden was in on Sacking Ukraine Government and put his son on the head of Burisma holdings... Biden knows Petroleum.

 

[Hobo Hilton]

There is one thing for sure.... The future is going to "tell the tale" if Biden knows the oil patch. If he does, that will be one of the few things he does know. I'm betting against him.

 

[Mr.BR]

Prices recovered, to almost pre SPR release announcements.

 

[Downzero]

"Our oil is so great but it has no value, but because our oil is so great, and despite the fact we are negative on it, our pride prevents us from selling it to you and degrading it."

Are we the fucking French?

Certainly there are times that oil has little value, you know, like when the world economy is melting down from a pandemic and nobody's going anywhere and planes aren't flying. Is that hard to understand?

 

[Hobo Hilton]

Certainly there are times that oil has little value, you know, like when the world economy is melting down from a pandemic and nobody's going anywhere and planes aren't flying. Is that hard to understand?

When oil has little value......... That is when you top off the Strategic Oil Storage facilities, worldwide........

 

[Hobo Hilton]

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.


On November 15th, Biden announced a proposal for a 20-year ban on oil and gas drilling in Chaco Canyon, located in northwest New Mexico. The justification for the ban is the proximity to the Chaco Culture National Historical Park, which is a UNESCO World Heritage Site; as such, the proposal would see a halt to all oil and gas drilling on federal lands within 10 miles of the park. The ban would be carried out by the Bureau of Land Management (BLM), which falls under the jurisdiction of the Department of the Interior (DOI).

Amidst Gas Shortage, Biden Proposes Another Drilling Ban › American Greatness

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.

amgreatness.com

 

[Charger442]

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.


On November 15th, Biden announced a proposal for a 20-year ban on oil and gas drilling in Chaco Canyon, located in northwest New Mexico. The justification for the ban is the proximity to the Chaco Culture National Historical Park, which is a UNESCO World Heritage Site; as such, the proposal would see a halt to all oil and gas drilling on federal lands within 10 miles of the park. The ban would be carried out by the Bureau of Land Management (BLM), which falls under the jurisdiction of the Department of the Interior (DOI).

Amidst Gas Shortage, Biden Proposes Another Drilling Ban › American Greatness

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.

amgreatness.com

10 miles is a long damn ways away.

 

[SilentStalkr]

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.


On November 15th, Biden announced a proposal for a 20-year ban on oil and gas drilling in Chaco Canyon, located in northwest New Mexico. The justification for the ban is the proximity to the Chaco Culture National Historical Park, which is a UNESCO World Heritage Site; as such, the proposal would see a halt to all oil and gas drilling on federal lands within 10 miles of the park. The ban would be carried out by the Bureau of Land Management (BLM), which falls under the jurisdiction of the Department of the Interior (DOI).

Amidst Gas Shortage, Biden Proposes Another Drilling Ban › American Greatness

As the United States suffers from an unprecedented shortage of natural gas, the Biden Administration has proposed yet another ban on drilling in the oil-rich state of New Mexico, CNN reports.

amgreatness.com

So why do we have a natural gas shortage?

 

[Hobo Hilton]

So why do we have a natural gas shortage?

An oversimplified answer..... Because it is being exported.

Cheniere Energy (NYSEMKT: LNG)

It’s the leader in producing and exporting LNG in the U.S

 

[Downzero]

An oversimplified answer..... Because it is being exported.

Cheniere Energy (NYSEMKT: LNG)

It’s the leader in producing and exporting LNG in the U.S

If foreigners will pay more for it than we will, why shouldn't it be exported?

 

[Mr.BR]

..............and its gone.
OPEC+ learned a thing or two from Musk pumping the Tesla stock with his tweets .

Chief Oil Analyst Amrita Sen telling Bloomberg TV that OPEC+ pulled off a “genius move” at their latest meeting, because "by keeping the meeting open throughout the month, the group can adjust its output if demand falls, effectively putting a floor under prices" adding that “you’re not going to be brave enough to sell against that."

 

[cas6969]

Typical liberal politician... "Let me save you from the real problem I caused, or the fake problem I made up!"

 

[RGStory]

So why do we have a natural gas shortage?

Lack of sufficient infrastructure.
We need more pipelines from the producing fields to the markets.

 

[Mr.BR]

Lack of sufficient infrastructure.
We need more pipelines from the producing fields to the markets.

That is the problem of shale you can't really make pipelines for it and given the industry lost investors some 300+ billion $ to make the US energy independent, no one is going to pay the infrastructure to the 'vaporware' industry that borrows billions of $ and drills but then fails to pay back the debts let alone turn a profit. Its not like its goverments job to make pipelines if the industry can afford them they will build them.

Shale only really made any real money in 2021 with the skyrocketing energy prices, before that shale was money losing business model literally incinerating stupid investors money for the best part of a decade.

 

[RGStory]

That is the problem of shale you can't really make pipelines for it

Can you expand on that?

 

[RGStory]

shale was money loosing business model literally incinerating stupid investors money for the best part of a decade.

I still disagree with your thesis on this, but I believe we covered that in another thread.

 

[Mr.BR]

I still disagree with your thesis on this, but I believe we covered that in another thread.

You can disagree but fact remains that it was losing investors money all the way for most of the decade. Hence investors near complete exit post 2016.

''From 2010 to 2020, large publicly traded U.S. producers poured a total of $1.18 trillion into drilling and pumping oil and gas, mostly in fracking. But they made only $819 billion in cash from their oil operations — a combined loss of $361 billion.''


As for pipelines, given shale industry's poor financial health, it can't / won't finance pipelines for prospects that might dry up in a couple of years, end of the day , you paying 2-3$ a gallon is not an issue for the industry is it, they are finally tourning a corner thanks to that.

https://www.bloomberg.com/news/arti...300-billion-u-s-shale-is-finally-making-money

 

[GreenGO Juan]

US shale production is set to reach 8.5 million barrels per day in December. That is not an insignificant number!!! The US shale industry alone is set to produce almost as much oil as Saudi Arabia does. And more than the entire country of china.

Also the Shale industry in the United States were not the only ones that got hit hard by the Covid panic shut down crap, The entire industry did that’s why OPEC is holding the reins on production because they lost their asses too. Have a friend who does helicopter maintenance on the North Shore Louisiana. Gulf production got shut down too, he was sending videos of him riding the floor buffer around the hanger because there wasn’t anything to do.

Early losses in the shale fields are not a surprise it takes time for these things to be profitable is early on it takes a lot of investment to get started, after the initial start up investment, cost of production drops.

As noted this year all these companies are making up the losses of the previous, OPEC can’t afford to play the price war that they were playing. Many of those countries oil is their main source of revenue they do not have diversified economy’s they were totally fucked!!

 

[Mr.BR]

Except Saudi Aramco, doesn't need bank loans and non investment grade bonds (71+% of US oil and gas bonds are not investment grade) banks shil out repackaged into xyz

''The result of this unrestrained lending was that by the third quarter of 2019, fully 91% of defaulted U.S. corporate debt was issued by oil and gas companies.16 The fracking companies analyzed in this report have $120 billion in debt set to mature from 2021 to 2025.17

COVID hit on the industry was not even counted into the 10y losing streak and COVID induced price spikes and access to freshly printed $$ being thrown around more than made up for the 2020losses.

Like said i do not dispute shale capacity to extract oil , but let's just say its not very profitable let alone investment grade business.

 

[RGStory]

You can disagree but fact remains that it was losing investors money all the way for most of the decade. Hence investors near complete exit post 2016.

As discussed in the other thread, I cannot assess if shale industry lost investor's money as a whole. I wouldn't doubt it. There were a lot of unscrupulous companies happy to take investor money to dig around in the dirt.

Having paid AFE's, negotiated JOA's and oil and gas leases, I again will look to my own experience as an indicator to state:
It is also a fact that many oil and gas companies made their investor's quite a bit of money from shale production.

I will hold the position that investing with the correct companies is more important.