US to sell half of strategic oil reserve

[ARCHIVED THREAD] - US to sell half of strategic oil reserve (Page 1 of 5)

Posted: 5/23/2017 12:07:30 PM EDT

"The U.S. Strategic Petroleum Reserve (SPR) SPR-STK-T-EIA, the world's largest, holds about 688 million barrels of crude in heavily guarded underground caverns in Louisiana and Texas."

"The White House budget, which will be delivered to Congress on Tuesday, proposes to start selling SPR oil in fiscal 2018, which begins on Oct. 1. The sales would generate $500 million in the first year, documents released by the administration showed.

Sales from the reserve would gradually rise over the following years, peaking at nearly $3.9 billion in 2027, and totaling nearly $16.6 billion from 2018 to 2027.

A release of half over 10 years averages about 95,000 barrels per day (bpd), or 1 percent of current U.S. output.

Although the figure is equivalent only to the output of a mid-sized field, it sends a powerful signal about the United States' decreasing need for imports as its own production reaches new highs."

"The IEA, which counts the United States as a member, requires member countries to keep strategic stocks equal to 90 days of the previous year’s net oil imports.

PVM said if U.S. imports in coming years matched those of 2016, the country would need to keep 489 million barrels of oil in the SPR, some 140-150 million barrels above the proposed new level."

"The United States has more leeway to release SPR crude as its own production C-OUT-T-EIA has surged 49 percent over the past five years."

http://www.reuters.com/article/us-usa-oil-reserves-idUSKBN18J0T2

Posted: 5/23/2017 12:08:46 PM EDT

[#1]

I don't agree with that spr should be maintained, especially while crude prices are low.

Posted: 5/23/2017 12:09:16 PM EDT

[#2]

Yeah, that's a fucking stupid idea.

Posted: 5/23/2017 12:09:19 PM EDT

[#3]

Good

We paid a shit ton to store that crap each year.

Posted: 5/23/2017 12:09:49 PM EDT

[#4]

Has anyone here actually been in the SPR caverns? They must be ginormous.

Posted: 5/23/2017 12:10:30 PM EDT

[#5]

Why sit on it when we have an absurd amount of proven reserves plus technology that has no par in recovering those reserves?

Seriously. I get "money in the bank" and "oh shit" cases. But with the number of capped Wells across the united States... Less debt seems like a smarter move.

Posted: 5/23/2017 12:10:57 PM EDT

[#6]

I am not an oil expert, but why are we importing oil if we need to sell oil? couldn't we just sell that to ourselves cheaper?

Posted: 5/23/2017 12:12:01 PM EDT

[#7]

Shouldn't we wait to see if the price gets a little lower?

Posted: 5/23/2017 12:12:28 PM EDT

[#8]

US oil consumption is roughly 20 million barrels per day, for perspective.

Posted: 5/23/2017 12:13:23 PM EDT

[#9]

Not a good idea.

Posted: 5/23/2017 12:14:56 PM EDT

[#10]

Quote History

Quoted:
I am not an oil expert, but why are we importing oil if we need to sell oil? couldn't we just sell that to ourselves cheaper?

View Quote

Type of crude and location. My understanding is many US refineries are setup for heavy crude and much of what we produce is light crude. Also getting domestic oil to East and West coast refineries is tricky.

(Anyone with direct knowledge feel free to correct me)

Posted: 5/23/2017 12:15:34 PM EDT

[#11]

Quote History

Quoted:
I am not an oil expert, but why are we importing oil if we need to sell oil? couldn't we just sell that to ourselves cheaper?

View Quote

We import alot from Canada. Mostly due to cost of transportation. There's a ton of pipelines that criss cross the border there.

We also important a lot of finished / refined products on the coast line because it's cheaper to refine crude in other countries due to emission regulations, etc.

We also export a significant volume of finished product.

Posted: 5/23/2017 12:15:43 PM EDT

[#12]

Those dudes at Bryan Mound guarding the place didn't look like they wanted to play around.

Posted: 5/23/2017 12:15:56 PM EDT

[#13]

Quote History

Quoted:
I don't agree with that spr should be maintained, especially while crude prices are low.

View Quote

Posted: 5/23/2017 12:16:02 PM EDT

[#14]

Quote History

Quoted:
Why sit on it when we have an absurd amount of proven reserves plus technology that has no par in recovering those reserves?

Seriously. I get "money in the bank" and "oh shit" cases. But with the number of capped Wells across the united States... Less debt seems like a smarter move.

View Quote

It wouldn't be so bad IF, we were just sitting on it. But we're not, government is involved. Which means that crap cost a lot of money to store in the fucking ground.

We took it out of the ground, where oil is stored for FREE. We put back into the ground, where it should be stored for free ...but oh no, that can't happen, because ...government.

It's expensive.

Posted: 5/23/2017 12:16:55 PM EDT

[#15]

... Good economic move

Posted: 5/23/2017 12:19:08 PM EDT

[#16]

Quote History

Quoted:
Good

We paid a shit ton to store that crap each year.

View Quote

On first impression I agree, we have "strategic oil reserves" under our country naturally. We no longer need to import massive amounts of oil we can pump it ourselves.

Posted: 5/23/2017 12:20:41 PM EDT

[#17]

Quote History

Quoted:
Why sit on it when we have an absurd amount of proven reserves plus technology that has no par in recovering those reserves?

Seriously. I get "money in the bank" and "oh shit" cases. But with the number of capped Wells across the united States... Less debt seems like a smarter move.

View Quote

I tend to agree with you. That being said, I think this would take us below a 90-day reserve threshold? How quickly can we tap into the reserves in the ground?

If anything this demonstrates what an oil powerhouse the US is these days. Things are a lot different now compared to when the reserve was created.

What's the shelf life on a bbl of oil? Can it be stored indefinitely?

Posted: 5/23/2017 12:21:08 PM EDT

[#18]

Bad move

Posted: 5/23/2017 12:21:29 PM EDT

[#19]

Quote History

Quoted:
Type of crude and location. My understanding is many US refineries are setup for heavy crude and much of what we produce is light crude. Also getting domestic oil to East and West coast refineries is tricky.

(Anyone with direct knowledge feel free to correct me)

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
I am not an oil expert, but why are we importing oil if we need to sell oil? couldn't we just sell that to ourselves cheaper?

Type of crude and location. My understanding is many US refineries are setup for heavy crude and much of what we produce is light crude. Also getting domestic oil to East and West coast refineries is tricky.

(Anyone with direct knowledge feel free to correct me)

Correct. Refineries and processing plants are tailored to a specific feedstock, sometimes it makes economic sense to buy an oil from a different formation to maximize returns.

Posted: 5/23/2017 12:22:05 PM EDT

[#20]

I don't know how I feel about this move.

Posted: 5/23/2017 12:23:13 PM EDT

[#21]

Quote History

Quoted:

It wouldn't be so bad IF, we were just sitting on it. But we're not, government is involved. Which means that crap cost a lot of money to store in the fucking ground.

We took it out of the ground, where oil is stored for FREE. We put back into the ground, where it should be stored for free ...but oh no, that can't happen, because ...government.

It's expensive.

View Quote

Is it going to cost half to guard half the oil? Or are we still going to pay just as much to store it because the same facilities and mechanisms are in place?

Posted: 5/23/2017 12:24:12 PM EDT

[#22]

Quote History

Quoted:
Things are a lot different now compared to when the reserve was created.

What's the shelf life on a bbl of oil? Can it be stored indefinitely?

View Quote

Well I don't know about "indefinitely, but 100's of millions of years ....yeah, the Earth holds it for a long, long time.

Posted: 5/23/2017 12:25:10 PM EDT

[#23]

We have plenty of oil already underground that hasn't been tapped.

Sell what's already been stored at a higher margin vs extracting what's still in the ground at a higher cost.

Not a bad move. The US is sitting on plenty of crude.

Posted: 5/23/2017 12:25:35 PM EDT

[#24]

Quote History

Quoted:

I tend to agree with you. That being said, I think this would take us below a 90-day reserve threshold? How quickly can we tap into the reserves in the ground?

If anything this demonstrates what an oil powerhouse the US is these days. Things are a lot different now compared to when the reserve was created.

What's the shelf life on a bbl of oil? Can it be stored indefinitely?

View Quote

Without government stepping on the industry's dick and the idle rig count- FAST.

I dare say that the plays in OK/TX/ND could outrun their support industries (specifically local tank storage) without a doubt.

Posted: 5/23/2017 12:26:13 PM EDT

[#25]

Quote History

Quoted:

It wouldn't be so bad IF, we were just sitting on it. But we're not, government is involved. Which means that crap cost a lot of money to store in the fucking ground.

We took it out of the ground, where oil is stored for FREE. We put back into the ground, where it should be stored for free ...but oh no, that can't happen, because ...government.

It's expensive.

View Quote

We are on the same page. Which is why I'm saying sell it. Make money.

Posted: 5/23/2017 12:26:17 PM EDT

[#26]

Quote History

Quoted:
Shouldn't we wait to see if the price gets a little lower?

View Quote

Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Helium Reserve.

Posted: 5/23/2017 12:27:58 PM EDT

[#27]

Buy high, sell low. Yep, sounds like a government program.

Posted: 5/23/2017 12:28:13 PM EDT

[#28]

Quote History

Quoted:
It wouldn't be so bad IF, we were just sitting on it. But we're not, government is involved. Which means that crap cost a lot of money to store in the fucking ground.

We took it out of the ground, where oil is stored for FREE. We put back into the ground, where it should be stored for free ...but oh no, that can't happen, because ...government.

It's expensive.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
Why sit on it when we have an absurd amount of proven reserves plus technology that has no par in recovering those reserves?

Seriously. I get "money in the bank" and "oh shit" cases. But with the number of capped Wells across the united States... Less debt seems like a smarter move.

It wouldn't be so bad IF, we were just sitting on it. But we're not, government is involved. Which means that crap cost a lot of money to store in the fucking ground.

We took it out of the ground, where oil is stored for FREE. We put back into the ground, where it should be stored for free ...but oh no, that can't happen, because ...government.

It's expensive.

You have no idea what you're talking about. Do you think there's magical maintenance free and completely secure storage to be found in nature?

Posted: 5/23/2017 12:28:35 PM EDT

[#29]

Quote History

Quoted:
Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Hydrogen Reserve.

View Quote

Do we really have one of those? We have a Strategic Helium Reserve, I think.

Posted: 5/23/2017 12:28:37 PM EDT

[#30]

Quote History

Quoted:
Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Hydrogen Reserve.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
Shouldn't we wait to see if the price gets a little lower?

Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Hydrogen Reserve.

H or He?

Posted: 5/23/2017 12:29:03 PM EDT

[#31]

16.6 Billion you say....

...hmmm, isn't that about what the wall will cost?

I'd rather have the freakin wall than 16.6 Billion in oil under the ground.

But what do I know.

Posted: 5/23/2017 12:29:13 PM EDT

[#32]

If you see prices going down, or even if prices hold at a slightly higher rate that would offset your cost of maintenance/storage....and your cost to create it has gone down in the last few years...

Sell it!

Posted: 5/23/2017 12:29:36 PM EDT

[#33]

This is Monopoly it ain't bingo.

What else are you gonna do when Saudi owns the largest refinery?

Posted: 5/23/2017 12:29:41 PM EDT

[#34]

Quote History

Quoted:
Do we really have one of those? We have a Strategic Helium Reserve, I think.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Hydrogen Reserve.

Do we really have one of those? We have a Strategic Helium Reserve, I think.

Making squeaky voices is a matter of the utmost national security.

Posted: 5/23/2017 12:29:50 PM EDT

[#35]

This is the perfect time for it, on account of how crude oil costs next to fucking nothing right now.

No, wait, not "perfect", the other thing-- yeah, retarded, it's a retarded time to sell the reserve.

Why couldn't these clown-town motherfuckers sell off some of the reserve when gas was four fifty a fucking gallon?

Posted: 5/23/2017 12:30:00 PM EDT

[#36]

Quote History

Quoted:
I don't agree with that spr should be maintained, especially while crude prices are low.

View Quote

Could be tied to a payoff.

Posted: 5/23/2017 12:30:43 PM EDT

[#37]

Quote History

Quoted:
Has anyone here actually been in the SPR caverns? They must be ginormous.

View Quote

Posted: 5/23/2017 12:33:56 PM EDT

[#38]

Quote History

Quoted:
This is the perfect time for it, on account of how crude oil costs next to fucking nothing right now.

No, wait, not "perfect", the other thing-- yeah, retarded, it's a retarded time to sell the reserve.

Why couldn't these clown-town motherfuckers sell off some of the reserve when gas was four fifty a fucking gallon?

View Quote

For the very reason it was 4.50/gal - scarcity

Posted: 5/23/2017 12:36:25 PM EDT

[#39]

Quote History

Quoted:
Has anyone here actually been in the SPR caverns? They must be ginormous.

View Quote

I thought they were just underground tanks

Posted: 5/23/2017 12:38:24 PM EDT

[#40]

Quote History

Quoted:
Do we really have one of those? We have a Strategic Helium Reserve, I think.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
Now is a great time to sell. Prices are going down.

I'm more worried about them selling off the Strategic Hydrogen Reserve.

Do we really have one of those? We have a Strategic Helium Reserve, I think.

You're right. I fixed it.

Posted: 5/23/2017 12:39:03 PM EDT

[#41]

Quote History

Quoted:

Making squeaky voices is a matter of the utmost national security.

View Quote

Are you 12 or just a millennial?

Posted: 5/23/2017 12:39:48 PM EDT

[#42]

Quote History

Quoted:
This is the perfect time for it, on account of how crude oil costs next to fucking nothing right now.

No, wait, not "perfect", the other thing-- yeah, retarded, it's a retarded time to sell the reserve.

Why couldn't these clown-town motherfuckers sell off some of the reserve when gas was four fifty a fucking gallon?

View Quote

It's always smart to sell strategic stuff when it's fulfilling it's purpose.

Posted: 5/23/2017 12:42:34 PM EDT

[#43]

Quote History

Quoted:
Are you 12 or just a millennial?

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:

Making squeaky voices is a matter of the utmost national security.

Are you 12 or just a millennial?

Are you super serious all the time or just on the Internet?

Posted: 5/23/2017 12:45:36 PM EDT

[#44]

good deal...Memorial Day Weekend and diesel goes up .10 a gallon....squash that price....

Posted: 5/23/2017 12:46:47 PM EDT

[#45]

Bad idea.

Next thing you know people will be getting down to a 90 round zombie reserve because ammo is cheap and plentiful at the moment.

Posted: 5/23/2017 12:47:42 PM EDT

[#46]

Sell it

Posted: 5/23/2017 12:48:23 PM EDT

[#47]

Quote History

Quoted:
You're right. I fixed it.

View Quote

Hey, for all I know we have a Hydrogen reserve too!

"The reserve was established with the enactment of the Helium Act of 1925. The strategic supply provisioned the noble gas for airships, and in the 1950s became an important source of coolant during the Cold War and Space Race."
https://en.wikipedia.org/wiki/National_Helium_Reserve

"Get gubberment outta the helium business!"

Posted: 5/23/2017 12:49:11 PM EDT

[#48]

This is going to fuck the oil market really hard.

But, the idea of a couple of large stockpiles makes me wince.

It would be better if there was more dispersement of the actual reserves in the form of required capacity at the individual refineries. (This was brought up a while ago)

Having the 60+ US based refineries add an equivalent amount of storage locally and then cut back the amount held at the SPR locations.
This would help both time-to-market (SPR can only shed 4M barrels a day anyhow) and reduce dependance on spot order fulfilling.

Posted: 5/23/2017 12:50:07 PM EDT

[#49]

Quote History

Quoted:
You have no idea what you're talking about. Do you think there's magical maintenance free and completely secure storage to be found in nature?

View Quote

lol, I do.

Posted: 5/23/2017 12:50:19 PM EDT

[#50]

Good. There really isn't a need for it to be full up right now. I can see keeping half for the event of a war or something but we have plenty of oil in the ground ready to be pumped out.

[ARCHIVED THREAD] - US to sell half of strategic oil reserve (Page 1 of 5)

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