Oil Tailwinds
Macro Perspectives
Yesterday, we talked about the President's use of the country's Strategic Petroleum Reserves, in an effort to manipulate oil prices lower (and therefore gas prices).
It started November 23, 2021, with the announcement of a 50 million barrel release over "several months" to address the "mismatch between demand [related to] exiting the pandemic, and supply."
The price of oil closed that day at $78.
Biden then announced on March 31, 2022, a plan to release 180 million barrels of oil, to address the significant global supply disruption caused by Putin's war on Ukraine."
The price of oil closed that day at $100.
Then in October of last year, he announced an end to the planned sale by December, BUT also said he would authorize significant additional sales in the coming months if required. So far, he's done 26 million barrels more than the March plan.
The price of oil today is $77.
And the U.S. Strategic Petroleum Reserves is now nearly 40%leaner.Â
We are back to 1983 levels (see chart above), whilst the U.S. population is now 43% bigger than it was in 1983, and the economy is seven times bigger.
For national security, these barrels will have to be replenished. The question is, at what price?
Likely much higher.
The U.S. government will become a tailwind for oil prices.
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