US to Tap More Oil from Emergency Reserve as Fuel Prices Surge

bloomberg.com

8 points·toomuchtodo··4 comments

- The Trump administration is releasing more oil from the nation’s emergency reserve as fuel prices surge less than two months before the midterm elections.

- The offer of up to 40 million barrels represents the last of a 172-million-barrel emergency drawdown from the Strategic Petroleum Reserve ordered to tame soaring energy prices after the US invasion of Iran. Bids are due by 11:00 a.m. central time on October 6, according to a statement from the Department of Energy.

- The SPR is projected to fall to its lowest level since 1982 once the latest release is completed. Federal law bars non-emergency drawdowns once inventories fall below 252.4 million barrels, while a 1981 report from the US Government Accountability Office advised against releases below 250 million barrels except in a “very severe emergency.” The reserve’s operational minimum — the point at which it becomes difficult for the infrastructure to function — is around 70 million barrels, according to ClearView Energy Partners, a Washington-based consulting firm.

It's believed anything below 300 million will damage the storage caves beyond repair.

So a dummy linear napkin calculation, knowing nothing about how this stuff works: given we've burned 30% of existing reserves from the beginning of the year, that's allowed us to get to $4.5 gas prices 7 months later. If things go linearly, the remaining 30 mil barrels before the non-emergency limit will get us 5.5 months. So will be at the reserve red line by March, and gas prices by then may be at $5.85?

How dumb is this calculation?

Best person to ask is https://bsky.app/profile/gasbuddyguy.bsky.social

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