Reports indicate that supplies are exceeding demand, which is a good sign for those of us who appreciate inexpensive and efficient fuel sources.
Posted by Leslie Eastman
It has been about six months since we last wrote about the Strategic Petroleum Reserve (SPR).
When President Donald Trump issued an executive order declaring a “national energy emergency,”’ he directed the Department of Energy (DOE) to prioritize refilling the SPR to its full capacity, which is approximately 714 million barrels.
At the time, the reserve held around 394 million barrels-about 55% of capacity-after historic drawdowns during the Biden administration. As a reminder, in April 2024, the Biden administration refused to purchase oil to refill its reserves.
Initially, U.S. Energy Secretary Chris Wright estimated it would take $20 billion and years to accomplish Trump’s goal of refilling the reserve to its maximum capacity.
Progress is beginning to be made in the wake of falling crude oil prices. Plans are being made to purchase 1 million barrels for the SPR.
The Energy Department announced Tuesday that it plans to buy oil for delivery in December and January, using a portion of the $171 million from President Donald Trump’s signature tax and spending law allotted for crude purchases.
“While this process won’t be complete overnight, these actions are an important step in strengthening our energy security and reversing the costly and irresponsible energy policies of the last administration,” Energy Secretary Chris Wright said in a statement.
West Texas Intermediate, the U.S. benchmark, is down about 30% since its peak in mid-January. It traded at about $58 a barrel on Tuesday, near the lowest since 2021.
That makes it an ideal time to refill the reserve, which at 408 million bbls is only about 60% full. But the Energy Department only has $171 million to buy crude — or enough for roughly 3 million bbls, based on today’s price.
Reports indicate that supplies are exceeding demand, which is a good sign for those of us who appreciate inexpensive and efficient fuel sources.
The amount of crude on tankers at sea has risen to a record high, signaling that a long-anticipated surplus may have started to materialize, while time spreads are starting to signal ample supply. The International Energy Agency expects world oil inventories to exceed demand by almost 4 million barrels a day next year as OPEC+ and some countries outside the alliance ramp up output, likely in a bid to recapture market share.
“We’ve got supply growth running three times faster than demand growth,” Bob McNally, founder and president of Rapidan Energy Group, said in an interview on Bloomberg Television. “Near-term we have a glut.”
The DOE just issued a report that highlights measurable progress in cavern refurbishment and system testing related to the SPR infrastructure, with 95% of its essential drawdown capacity restored by 2025. However, the agency also warns that aging salt caverns remain a medium-term risk requiring sustained congressional funding through 2028 for complete modernization.
The Trump administration’s handling of the SPR will be a strong selling point in the next presidential election cycle for anyone on the team who cares to throw their hat in the ring.
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This is another fix of autopen underway. It’s not an overnight fix but maybe the voters can be educated in the process, without the legacy media of course.
That chart with Limp Biscuit Joe needs a little Viagra
I like the “Let’s Go Brandon”.
People forget that it started at a NASCAR race where the winner was somebody named Brandon.
The coverage was live and the crowd was shouting “F_K JOE BIDEN”!”. Clearly heard on air.
The girl with the mike tried to cover by claiming the crowd was chanting ” Let’s go Brandon”… “And that is the rest of the story”. 😎
That would be Talladega Alabama. My home!
Hooray!
“Trump Authorizes Strategic Reserve Refill as Oil Prices Dip”
You won’t find Ed miniprick doing that for Britain, he only wants “cheap wind & solar” (& needs a lobotomy).
If he ever did buy oil, he’d wait until it was top dollar to prove oil/gas is expensive !!
(Remember Gordon Brown selling UK gold stocks at the lowest price)
He has had a lobotomy, they took out the bit that was working and left him with the bit that knows how to eat a bacon sandwich…. Rumour has it Rachel Reeves the first female chancellor (don’t forget to mention that) has enrolled on the Gordon Brown gold trading course for beginners. Then she is going to take lessons in energy trading. Suck and sell when it’s high sleep and store when it is low, Maybe get Miliband to allow some suck and selling to happen, which he seems insanely opposed to doing.
I would think that the refilling of the SPR should be algorithmically based, when oil prices fall below a certain level with a forecast of it lasting XX number of months, the SPR should automatically purchase contracts from, say, the US producers at a price-support level set by law.
Drilling or fracking costs in the US has a floor of something like $58/barrel, so, as long as we have a need to refill the SPR we should ensure that we don’t let the level of fracking drop below some predetermined level.
Also, rather than budgeting $170m for purchases of oil to refill the SPR we should set up a fund to keep the SPR full and any sales from the SPR are retained by the fund to re-purchase oil when the price of oil collapses again rather than, like what might have happened under Biden, the oil was taken out of the SPR and the money put into the general fund and not retained for repurchases of oil at a lower price.
“like what might have happened under Biden, the oil was taken out of the SPR and the money
put into the general fundfunneled to leftist NGOs and not retained for repurchases of oil at a lower price.”FIFY
Remember that the SPR was drained to lower gasoline prices because his polls were suffering during his inflation gift to the American people. It didn’t work very well…gas didn’t come down until Trump stepped in.
More good news.
He should simply open more offshore bidding regions with the request that so many million barrels each gets DONATED to the reserves
Next up is infrastructure expansion….
Western Gateway Pipeline: A new corridor for American energy – Phillips 66
It seems that Biden used the SPR (Strategic Petroleum Reserve) as the Political Reserve to ease the economic effect of auto-biden’s policies.
It didn’t work.
The SPR needs to be refilled. It’s there because “we may need it someday” for the USA’s defense and not quill’s political motive.
Meanwhile actions to impose sanctions on Russian oil sales have spooked markets with an almost $5 rebound from the lows.
Sanctions on Russia on oil, gas… really useless. There is always a buyer. Putin is laughing his way to the bank. Trump should end the R-U war (he can) and start dealing with Russia as an ally.
Why make deals with Russia for development of her vast mineral and energy resources, when the MIC and Western “Intel” are completely and totally sure that they can overthrow Putin and steal it ALL for their masters!
Western elites have shown themselves more than willing to sacrifice EVERY Ukrainian they can capture, kidnap, or impress in furtherance of their goal of preserving European-style “democracy;” you know, the kind where the voters approve the Brussels candidate, or the election is nullified or thrown out!
In a better world we would be building a bridge or causeway across the Bering Straits to enable American workers and truckers quick and easy access to Siberia’s riches. Instead we are driving Russia and India into the arms of Xi and China, while a drunk and dissolute Europe throws lit matches at the can of nuclear WWIII!!
If the west is so confident that they can overthrow Putin, why haven’t they done it and stolen everything already?
Russia will never be an ally as long as Putin or his allies are in charge of it.
Russia is not our ally. It never has been and won’t be until their system of government changes and the people embrace freedom and less corruption.
Oil is fundamentally an on-demand commodity, like natural gas. Enough to operate for a year is 7.5 billion barrels for the USA alone; more than 10 times the SPR size; difficult to store.The SPR now contains about 20 days of oil for the USA, but its maximum pump rate is 4.4 million barrels per day or about 100 days’ pumping – since it is only 60% full. The full SPR could supply the military for a year, provided an enemy were dumb enough not to eliminate the juicy oil target immediately.
The USA is now producing 13.6 million barrels per day – at four times rate the SPR can be pumped out, but the USA consumes 20.6 million barrels per day!
The SPR is a feel-good symbol of limited strategic value. I suspect the Congress knew this, but did it for the optics – a visible, but meaningless, response to the OPEC embargo in 1973.
There are lots of sources of oil. Even before Trump, most of the oil the we consumed came from inside the US.
The purpose was to buffer the US supplies in case a foreign adversary was able to cut off oil imports for a time. It was never designed to supply 100% of the US’s needs.
Personally I think the strategic oil reserve is a dumb idea, and should be abandoned. It’s a 30-day supply that doesn’t provide any real world buffer to oil production disruption. It’s more of a political statement/tool than anything else.
Maybe the point of this is that oil is an energy source that CAN be effectively & efficiently stored, unlike solar & wind energy.
30 days of ammunition, so to speak, is better than no ammunition when you need it.