Most people forget that the SPR was not established in order to stabilize prices during supply disruptions.
Do you have anything updated today to say about the SPR and your thinking about that?
Back in March, the SPR was on the table being looked at pretty seriously.
This is the first time the SPR has been tapped explicitly in response to high prices.
FORBES: Obama Taps Strategic Petroleum Reserve Without Good Reason
The most intriguing aspect of the debate over an upcoming SPR release has gone almost unnoticed.
FORBES: Will Obama Pull The Trigger On The Strategic Petroleum Reserve?
To begin with, the SPR faces inherent physical constraints in supplying the oil market.
Mr Obama has form when it comes to tapping the SPR in dubious circumstances.
At the end of the day, no amount of fiddling with the SPR can replace sound energy policy.
This morning, Treasury Secretary Geithner said that the United States will continue to evaluate use of the SPR.
WHITEHOUSE: Press Briefing by Deputy Press Secretary Josh Earnest
Accordingly, opponents of an SPR release argue that the reserve should be shut-in until a true supply disruption hits the market.
Oil economist Timothy Considine examined a similar 30 million barrel release of crude from the SPR prior to the 2000 election.
Normally the SPR is an emergency account, only used when there are genuine, direct interruptions to U.S. energy interests.
FORBES: Obama Taps Strategic Petroleum Reserve Without Good Reason
For the federal government to use the SPR and its gold reserves for arbitrage would at least be a strategy.
Currently the SPR is the fullest it has ever been, with 727 million barrels of mostly light, sweet crude in storage.
FORBES: Obama Taps Strategic Petroleum Reserve Without Good Reason
The White House appears to be telegraphing that it may intervene in the oil market, via the SPR, in the future.
Ten days ago, Administration officials said they were watching the supply situation and considering all options, including an SPR release.
FORBES: As Gasoline Price Jumps, Will Isaac Coax Obama To Tap Strategic Reserves?
Others are saying that we should be buying oil to bring the SPR up to its original planned size of one billion barrels.
And is that what -- there's a reason why people are talking again about the SPR as if something is about to happen.
It would dampen the volatility of the oil market, and it would generate profits that would help offset the ongoing costs of the SPR.
However, if the administration does have knowledge of the timing of an Israeli attack, a preemptive release from the SPR could tip its hand.
FORBES: As Gasoline Price Jumps, Will Isaac Coax Obama To Tap Strategic Reserves?
The SPR is stored in a series of massive underground salt domes on the U.S. Gulf Coast, immediately adjacent to several internal energy transport hubs.
FORBES: Obama Taps Strategic Petroleum Reserve Without Good Reason
Some analysts argue that President Obama would never tap the SPR so soon before the election, out of fear it may appear politically self-serving.
FORBES: Will Obama Pull The Trigger On The Strategic Petroleum Reserve?
Indeed, with an SPR release less likely, crude traded higher overnight.
FORBES: As Gasoline Price Jumps, Will Isaac Coax Obama To Tap Strategic Reserves?
Doing this would help even out variations in the price of crude oil, and it would generate profits to offset the costs of maintaining the SPR.
The Obama team, unquestionably aware of this lesson of history, is likely weighing the potential political costs of an SPR release versus its possible economic benefits.
FORBES: Will Obama Pull The Trigger On The Strategic Petroleum Reserve?
As large as the SPR and other similar reserves elsewhere in the developed world are, they are necessarily finite, and they do not equate to fresh production.
FORBES: Obama Taps Strategic Petroleum Reserve Without Good Reason
There was some speculation yesterday that the the government was set to release reserves from the Strategic Petroleum Reserve (SPR), but the White House later denied it.
Such assertive language evinces a growing belief among pundits that a more hawkish tone from the White House about the SPR may render it a more powerful weapon.
Fortunately, however, a constructive strategy for the SPR is possible.
The SPR is only equipped to remedy short-term supply disruptions.
应用推荐