Posted on Jul 5, 2022
Oil from U.S. reserves head overseas as gasoline prices stay high
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WTH? Why is Brandon sending OUR oil reserves overseas when it is needed HERE. He has placed America LAST. Just more proof that this inept clown is completely unfit for office.
Oil from U.S. reserves head overseas as gasoline prices stay high
Posted from reuters.com
Joe Biden
Office of the President (POTUS)
Oil
Posted >1 y ago
Responses: 2
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It's important to realize what happens when oil is released from the strategic reserve. It gets sold to oil companies who in turn may sell it overseas. I.e., it is the private companies selling it.
"When the U.S. decides to pull barrels of crude oil from the reserve, it is known as an emergency drawdown or release. During a drawdown, the U.S. selects an amount of crude oil to sell, then auctions it off to the highest bidder — typically an oil company. "
https://www.cbsnews.com/news/strategic-petroleum-reserve-gas-prices-biden-cbs-news-explains/#:~:text=When%20the%20U.S.%20decides%20to%20pull%20barrels%20of,the%20reserve%20oil%20been%20used%20in%20the%20past%3F
Another thing I've learned recently, listening to an industry export is that oil isn't just oil. We produce a surplus of light sweet crude which (along with light sour crude) is primarily what's in our strategic oil reserve. But we already have all the sweet crude domestically that we need. We need to, in turn, trade it for heavier oils that we don't produce enough of domestically.
https://www.thebalance.com/the-basics-of-crude-oil-classification-1182570#:~:text=There%20are%20six%20types%20of%20crude%20oil%3A%20light%2Fsweet%2C,oil%20through%20exchange-traded%20funds%20%28ETFs%29%2C%20options%2C%20and%20futures.
So when the government releases oil from the strategic reserve, some oil company buys it for cheap and then uses a lot of it to trade for what they really need, heavier oils. The price relief happens by giving the oil company a cheap supply to in turn increase the global market supply.
"When the U.S. decides to pull barrels of crude oil from the reserve, it is known as an emergency drawdown or release. During a drawdown, the U.S. selects an amount of crude oil to sell, then auctions it off to the highest bidder — typically an oil company. "
https://www.cbsnews.com/news/strategic-petroleum-reserve-gas-prices-biden-cbs-news-explains/#:~:text=When%20the%20U.S.%20decides%20to%20pull%20barrels%20of,the%20reserve%20oil%20been%20used%20in%20the%20past%3F
Another thing I've learned recently, listening to an industry export is that oil isn't just oil. We produce a surplus of light sweet crude which (along with light sour crude) is primarily what's in our strategic oil reserve. But we already have all the sweet crude domestically that we need. We need to, in turn, trade it for heavier oils that we don't produce enough of domestically.
https://www.thebalance.com/the-basics-of-crude-oil-classification-1182570#:~:text=There%20are%20six%20types%20of%20crude%20oil%3A%20light%2Fsweet%2C,oil%20through%20exchange-traded%20funds%20%28ETFs%29%2C%20options%2C%20and%20futures.
So when the government releases oil from the strategic reserve, some oil company buys it for cheap and then uses a lot of it to trade for what they really need, heavier oils. The price relief happens by giving the oil company a cheap supply to in turn increase the global market supply.
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SSG (Join to see)
Then it was lunacy to release any oil from the reserves, since at some point they will have to buy more to replace it.
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SPC Kevin Ford
CPO Nate S. - It's a commodity. If a private US firm buys oil out of the strategic reserve, they could store it is special tanks while at the same time selling off other sweet crude stocks they have that they otherwise wouldn't. It gets down to the question, do they have an excess of light sweet crude and if so they are going to sell it.
If we are sitting on a thousand tons of chicken feed but we only have a few chickens and run a dairy farm, we're going to try and think of ways to convert that into cattle feed. As I understand it, that's kind of what's going on here. A little bit anyway.
"Simply put, America has an infrastructure problem that is materially affecting our industry and its ability to grow. As noted before, light/sweet, while preferable in many aspects to heavy/sour, is not a perfect substitute and both are needed. Therefore, to support America's continued growth as an oil producer, we must either retool already existing U.S. refineries, which is not a feasible option given already intensive capital investments in the existing refineries, or find markets that desire our crude to which we can export our crude in an economically competitive manner.
...
The other problem, as noted briefly above, is that American refineries are still dependent on some amount of heavy/sour. Even the more advanced refineries geared towards operating on light/sweet have to have some proportion of heavy/sour in their slate.
And the question now becomes: where will that come from and how will it affect our industry. ..."
https://fsmetals.com/about-us/blog/americas-light-sweet-problem
If we are sitting on a thousand tons of chicken feed but we only have a few chickens and run a dairy farm, we're going to try and think of ways to convert that into cattle feed. As I understand it, that's kind of what's going on here. A little bit anyway.
"Simply put, America has an infrastructure problem that is materially affecting our industry and its ability to grow. As noted before, light/sweet, while preferable in many aspects to heavy/sour, is not a perfect substitute and both are needed. Therefore, to support America's continued growth as an oil producer, we must either retool already existing U.S. refineries, which is not a feasible option given already intensive capital investments in the existing refineries, or find markets that desire our crude to which we can export our crude in an economically competitive manner.
...
The other problem, as noted briefly above, is that American refineries are still dependent on some amount of heavy/sour. Even the more advanced refineries geared towards operating on light/sweet have to have some proportion of heavy/sour in their slate.
And the question now becomes: where will that come from and how will it affect our industry. ..."
https://fsmetals.com/about-us/blog/americas-light-sweet-problem
America could become a net energy exporter by 2020. America is now the world's biggest producer of oil. Wow! And American crude oil is the best in the world. Really. We make the best oil. Ever. In fact, it's arguably too good… And oddly, that's a problem. A light, sweet problem. And, we have an infrastructure problem… But first. Some background. As...
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