by Tyler Durden at ZeroHedge
As we noted earlier, Biden’s “exchange-based” release from the global SPR has been a dud, as oil prices surged on Tuesday after the administration confirmed plans for a record-setting 50M barrel release which is contingent on America’s ability to convince Japan, the UK and several other allies to engage in “global” swaps from the strategic reserves, for a total of 100 million barrels.
The decision was aimed at helping alleviate some of the pain Americans have been feeling at the pump this fall.
Of course, we don’t have to explain why Biden shouldn’t bother with that SPR release: his administration did that himself last month – insisting that a jolt from the SPR wouldn’t make a difference in long-term crude prices.
A closer look at the decision might explain the timing; Biden’s SPR announcement comes amid a long-delayed Wednesday sale of oil-exploration leases in the Gulf of Mexico, a decision which has enraged environmentalists, and is ‘unlikely to help tame rising oil and gasoline prices’, according to Bloomberg.
1. Draining ‘strategic’ global #oil reserves when oil is sub-$80
2. Raising cost of capital for O&G until capex is starved
3. Doing *nothing* to alter fossil fuel Demand
Tomorrow begins a new era: $200+ Brent in ~two years is not a tail risk, but a likely outcome #OOTT #OPEC
— Peter Sutherland (@econ_713) November 23, 2021
And so, during a Tuesday speech, Biden promised Americans that the drawdown from the reserves would be global in scope, claiming that he had spoken with China about joining it in releasing more from the reserves, while his press secretary importantly said the White House wouldn’t rule out even more cuts.
Biden said that the coordinated action would “span the globe in its reach and ultimately reach your corner gas station – God willing,” adding “I will do what needs to be done to reduce the price you pay at the pump.”
In other words, if gas prices don’t drop, blame God.
Biden also ‘reassured’ Americans that they could “rest easy” knowing that stores would be well-stocked this season, something that they probably appreciated after months of near record-setting inflation (and certainly the highest in 30 years) not just in the US, but across the world.
Reminder: this is the guy with his finger on the button…
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