What happened to all the fracking we had going on in the midwest. I thought a few years ago they mentioned we'd soon be an oil exporter?

Back on topic.

When there were initial discussions of a release of the SPR I was skeptical. At the time the talk was of 30 Million barrels which is nothing big. Bringing India, China, Japan, Korea and the UK onboard with the plan was a smart move, I do not think that has ever been done before.

Another smart move was bringing forward the Congressionally mandated SPR releases. These releases will happen anyway so it is better to have them now than 8 months from now. That will account for about 35% of the total.

US production is coming on line super fast. September numbers are not out yet but I expect them to be much higher than August. December is looking liked it could be one of the top 15 months in US history.

This is a nice "fuck you" to OPEC.

...........

I don't disagree with anything you have said above (I don't keep track enough to comment on you US production numbers so I will just agree). I hope it has an overall positive impact on OPEC and production levels.

This is the real question, how will OPEC react?

It is clear that the Saudi's, and Putin, want to drive up prices. Putin has been talking about $100 oil for months. WTI peaked in late Oct at $85.41 a barrel. Despite the fairly weak impact of today's SPR announcement, it's at $76.60. In some ways, the US diplomatic push and SPR talk achieved what it intended: nearly a $10 drop and stop crude heading toward $100 a barrel......But OPEC, and Putin, could crush any of that success in a heartbeat.

Historically getting in a fight with OPEC has ended badly for the US, however this is a bit different. Biden got a bunch of counties on board. China stockpiled millions of barrels during the depths of Covid. Add to this rapidly expanding US production and there is liquidity in the marketplace that previously only OPEC could provide.

Just checking the markets now, Brent and WTI are both up on this announcement likely due to reports that OPEC would reassess their output. The funny thing is the folks that will benefit most, short term, from any OPEC overreaction will be US producers.

the choice to get other countries involved is significant as I stated in my first post. The question will be whether OPEC and Putin see this as significant (and sustainable) as you and I do.

I'll watch for your updates. I'd continue to respond but at some point someone might tell us to get a room........

No shit! (pink)
Who would have thunk it. I want to hug you both.

get the f away from me.....:)

They were all in when oil was $100 a barrel, but it isn't as profitable now.

I feel like I should be drawing a privacy curtain closed at this point or something.

High energy prices are a positive. They:
A) Discourages unneccesary driving.
B) Reduces the ridiculous subsidizes for huge, inefficient cars and wasteful commuting practices.
C) Provides pricing support to clean energy sources. (There is significant price competition between energy sources).
D) Ultimately lead to lower highway maintenance and construction costs -with less driving.


Trump consistently, and flagrantly, messed with the healthy functioning of energy markets (and every other free market) - whenever he thought it might deliver some short-term gain.

It is not reasonable for most modern Republicans to criticize Biden here.

But someone needs to be a grown up!!!


It is utterly crazy to stimulate inflation (as was done throughout the Covid years, and the rest of the Trump/Biden economies).

Then pass a infrastructure bill to promote economic growth, inflation, more highways and bridges......
Thus stimulating greater energy use, higher prices and more inflation.

And THEN make symbolic gestures about lowering gas cost.

That's just bulksh#t.
It is precisely the kind of crap Trump would do.

kinda new at this be gentle with me.

Even if it doesn't have a long term impact, it does potentially buy time that allows the US industry to ramp up production. I haven't been following, but I assume that a lot of production what shut down when oil dipped last year. If the price goes up to $100 a barrel then the US suppliers will be getting back into the game. Outside of shocks like pandemics and wars, over time the market will work itself out even with more restrictive polices. In the mean time we will be making a tidy profit on the oil we bought at near $0 last year.

If the US ramps up production as is being suggested here I think that's great. I am being told that is already in the works.

I do understand that markets work themselves out.

Part of what I was told a month ago (I think) was

1) the President didn't have a lot of near term solutions
2) tapping into the SOR would have minimal effect (18 cents per gallon)
3) a lot of Middle Eastern folks wanted to talk to him. He wasn't sure if he was going to talk to them.

etc.

I don't think it was very smooth answers to very straight forward questions. I don't think the answers helped this process or citizens general anxiety about our economy.

Your viewpoint may differ.

edit: heres my first paragraph of first post. I think we are saying the same thing??

I too think this is mostly symbolic. I think the coordination with other countries helps send a stronger message. But unless some of those other countries have the ability to produce (and transport) over the longer term I think OPEC will see this mostly for what it is.

The US is actively ramping up production. If it can pull oil out of the ground/ocean it is being put to work.

It appears that OPEC will mildly retaliate by shaving their projections. They will likely trim the increased output that they promised early in the year. This is great news for US producers as it will keep prices artificially high while they ramp up production and make $$$$. It will also enable US producers to further develop their export business (China). The funny result is that, near term, Biden will turn out to be one of the best Presidents the US oil industry has had.

BUT.

Long term this could get ugly. OPEC and Russia will give US producers a year to ramp up production then they will flood the market, driving prices down. This could crush the heavily leveraged and less scalable US producers.

Going to be an interesting 12 months

slick move

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maybe she's born with it, maybe it's chlorine
If you're injured and need some sympathy, PM me and I'm very happy to write back.
disclaimer: PhD not MD

I'm not afraid to do it in public.

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I'm beginning to think that we are much more fucked than I thought.

Groan

3 points awarded

What the hell happened in this discussion? This is so not LR-like. I guess everyone is in a festive mood.

jpo and I had a nice discussion last week.

you just wait until I find a sense of humor......

I just witnessed a nice moment in the LR but I don't believe in Santa. ;-)

maybe it will be a festivus miracle.....:) (I got a lot of problems with you people!!)

Let's just call it a Père Noël miracle and we're good.

deal

You must be looking for a fight!

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Suffer Well.

i said "deal" while having no idea what that is. Assuming it's a Frenchie thing