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Arthur Berman

Arthur Berman

Arthur E. Berman is a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and…

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One Chart That Explains The Stupidity Of Congress’ SPR Plan

One Chart That Explains The Stupidity Of Congress’ SPR Plan

Buy high, sell low. The definition of stupid.

That’s what Congress is considering as it eyes selling oil from the U.S. Strategic Petroleum Reserve (SPR) to pay for certain projects in its latest spending plan.

The last time the U.S. bought oil for the SPR in 2000 through 2005, oil prices were rising (Figure 1). Now Congress wants to sell oil when prices are the lowest in a decade and continuing to fall. Related: SPR To Be Used To Raise Cash For US Gov

USSPRWTI

Figure 1. U.S. Strategic Petroleum Reserve stocks and WTI crude oil price in October 2015 dollars per barrel. (Click Image To Enlarge)
Source: EIA, U.S. Bureau of Labor Statistics, Federal Reserve Board of St. Louis & Labyrinth Consulting Services, Inc. Related: Policy, Coincidence Or Conspiracy: What’s Really Holding Oil Prices Down?

Members of Congress who routinely tell us that they are good at business need to look at the chart above and explain why we should believe them.

Selling oil from the Strategic Petroleum Reserve now is a terrible idea.

By Art Berman for Oilprice.com

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  • K Yamaguchi on October 30 2015 said:
    Don't believe they are selling from the SPR until 2018 and then it is over an 8 year period. By then who knows what congress will do with budget, or anything else. Putting the oil up for sale in the budget was just a gimmick to make it appear to balance. Budget balancing is always done over a 10 year period. Meaningless to oil at this point.
  • Len B on October 30 2015 said:
    Wake up not so terrible if u think its their intention to depress prices..hey? Think out of the box!
  • phil on December 15 2015 said:
    Letting arabs deplete remaining oil is a bad omen for future. Oil is not finite and low oil will make it hard to follow The new climate change objective

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