But what of the SPR?

An emailer asks:   

is one extra detail that keeps gnawing at me, relating to the oil

I am trying to get good numbers on the oil additions to the strategic
petroleum reserve. From what I see, it is maintaining one-off demand for
500,000 to 1 million bpd. I hear that these purchases will slow or stop
soon (summer?) so I conclude that if this is true, it will affect the
demand/supply equation and the resulting price of oil. It could cause an
unexpected kicker down and really pull in believers during an economic
slowdown before oil prices resume their growth, especially if it ends up
as a popular news story."    

Here is the 411 on the Strategic Petroleum Reserve:

"Only about 100,000 barrels a day go into the United States reserves
out of worldwide consumption of 82 million barrels. The United States
consumes about 20 million barrels of oil a day, or about a quarter of
global consumption, so at its current level of about 671 million barrels,
the reserves would provide the equivalent of just two months of crude


Do the math:  100,000 barrels per day stored out of a daily consumption of 20 million is approximately  0.5% (1/2 of 1%) — whileit may have some impact on the margins, it is a relatively insignificant

Incidentally, there is a lot of good info on the SPR at Cryptome.

UPDATE: April 28, 2005   10:52pm

Apparently, Petrol deliveries are still scheduled right through August 2005

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  1. Ken Houghton commented on May 2

    While the magnitude may be small, the signaling value would likely be a multiplier of that. Otherwise, there’s nothing “strategic” about increasing the reserve.

    (As an aside, many of the people who dismissed the GS report with “Bush would sell the SPR if Oil hit $105” were probably claiming that the SPR would be opened at $50 in the days when hitting $30 was considered high–you know, ca. 2002?)

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