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Biden's Bid To Lower Oil Prices Fails

Biden's Bid To Lower Oil Prices Fails

President Biden finally succeeded in…

U.S. To Release 11 Million Barrels From Strategic Petroleum Reserves

The United States is set to release 11 million barrels of oil from its Strategic Petroleum Reserves (SPR) ahead of Iranian sanctions that are set to go into effect just a couple of months from now, according to Reuters. This reserves sale is part of a previously announced drawdown for fiscal year 2019.

The SPR, which technically serves as emergency oil stockpiles, has only been tapped for this reason three times since its inception, according to the Energy.gov website. More often, the reserves have been tapped for test sales, to cushion the blow of minor supply disruptions, and to generate revenue.

While part of an early plan, the 11 million barrels are thought to take the sting out of what many feel will be supply disruptions caused by US sanctions on Iran, which are set to take effect in November. It will also take the sting out of high gas prices at the pump—a nuisance for Republicans in the runup to mid-year elections.

The sale is one of several this year alone, including FY 2018 mandated and FY 2018 modernization sales, in which billions of the SPR were sold.

Some think the sale may help to curb gasoline prices, which are stubbornly high heading into mid-year election season. Others think that the SPR won’t do anything to lower prices at the pump.  While the jury is out as to the effect an SPR release will have on prices, most agree that global oil inventories will take a hit when sanctions inevitably bite Iran, swinging the industry into a deficit.

The 11 million barrels of sour crude will be sold between October 1 and November 30, which coincides with the next fiscal year.

By Julianne Geiger for Oilprice.com

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  • Michael Goff on September 05 2018 said:
    This whole thing is insane, since the price of crude is decided upon by a group men at a table in Vienna ( or where ever) . I don't have anything against the rich , until their decisions make the pinch on the common person that much tighter. Who felt the sanctions in Iran the first time around? Not the Imams and politicians, it was the regular everyday people . Here is the US , gas is up to almost three dollars a gallon again, despite the oil and gas booming here is Texas and other places. Why does it so rarely drop any depreciable amount? Why does lower gas prices usually signal a bust period when supply is up, price is supposed to go down . But that doesn't seem to happen with oil and gas. If i am in error , please let me know .

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