Is the US really better equipped to handle severe global supply dislocations now than since the 1960's Is LTO a fungible equivalent to the oil stored in the SPR? I don't think it is.
The US exports most LTO production. SPR oil is intended to be refined and subsequently used in the best interest of the nation. Except of course for that stuff Biden exports in a somewhat vain attempt to lower global oil prices.
It is extremely unlikely that Congress will fund the replenishment of the SPR in the next 2 year. It is much more likely that Congress continues to dip into the SPR to make spending bills appear revenue neutral.
Thanks for the comment! I didn’t get into it, but the drawdown has been mostly of the sour grades. We have only sold something like 40 million barrels of sweet. In fact it is now reaching the point where the SPR is mostly sweet crude.
I agree with you on the replenishment. It is really hard to imagine Congress going for the expenditure of refilling it, and the left would throw their bodies in front of it to avoid the “support” for the oil and gas industry.
Dave that is a great question. I am not familiar with what the recovery is from oil stored in salt caverns. Presumably some amount is residual. I will ask around.
Ted, this is a good thought provoking article.
Is the US really better equipped to handle severe global supply dislocations now than since the 1960's Is LTO a fungible equivalent to the oil stored in the SPR? I don't think it is.
The US exports most LTO production. SPR oil is intended to be refined and subsequently used in the best interest of the nation. Except of course for that stuff Biden exports in a somewhat vain attempt to lower global oil prices.
It is extremely unlikely that Congress will fund the replenishment of the SPR in the next 2 year. It is much more likely that Congress continues to dip into the SPR to make spending bills appear revenue neutral.
Thanks for the comment! I didn’t get into it, but the drawdown has been mostly of the sour grades. We have only sold something like 40 million barrels of sweet. In fact it is now reaching the point where the SPR is mostly sweet crude.
I agree with you on the replenishment. It is really hard to imagine Congress going for the expenditure of refilling it, and the left would throw their bodies in front of it to avoid the “support” for the oil and gas industry.
Dave that is a great question. I am not familiar with what the recovery is from oil stored in salt caverns. Presumably some amount is residual. I will ask around.
Good stuff Ted. My question is how much of the remaining 400 mm bbls is truly available should we need it? You never get everything out of a tank.