[joeltrout]

I was watching Joe Terranova, veteran oil trader, talking about oil prices on the show Fast Money on CNBC when he made an excellent point.

He said the Bush Administration thus far has been the worlds best oil trader. They have been filling the SPR consistently since Bush got into office and every barrel of oil they have put in the SPR was bought for less than $122/bbl and actually most of it was bought for less than $60/bbl and today is worth around $122/bbl. Not a bad investment and that doesn't include the security it brings our nation if something sour did happen and we were cut off from our oil supplies.

Most traders buy and sell all the way up or all the way down. The Bush Administration has been the ultimate buy and hold trader and with long-term bullishness that is the absolute best strategy.

joeltrout

[GeoJAP]

The Bush administration's filling of the strategic national reserve have only made me think that they really, really, really want to bomb Iran or Venezuela, and this is insurance in case they ever got bat-shit-insane enough to do actually it.

[Fishman]

On the other hand, Bush filling the SPR seems to me like he's got a lot more sense than the idiot Democrats who want him to use it to modify prices (which it won't). More likely insurance against other "bat-shit-insane " folks in the world.

[joeltrout]

I just hope the Dems don't take office, start draining the SPR, and then something happens and we actually need that oil for our military to operate in defending our country.

joeltrout

[Cashmere]

Joel trout.

Need the oil to "defend our country".

Eat some more donkey shit, why doncha?

Are you worried more about the Canadians or the Mexicans invading?

If what you really mean is, "I hope we have the SPR full so that when we attack the next non-aggressor nation on our hit list we can really keep the bombing at full tilt when oil supplies are cut off," then just say it.

[NTBKtrader]

Maybe Bush is buying oil for our country for the simple fact that they know, understand, and agree with peak oil albeit relatively privately.

[darren]

$this->bbcode_second_pass_quote('joeltrout', 'I') just hope the Dems don't take office, start draining the SPR, and then something happens and we actually need that oil for our military to operate in defending our country.
joeltrout

[americandream]

$this->bbcode_second_pass_quote('Cashmere', 'J')oel trout.

Need the oil to "defend our country".

Eat some more donkey shit, why doncha?

Are you worried more about the Canadians or the Mexicans invading?

If what you really mean is, "I hope we have the SPR full so that when we attack the next non-aggressor nation on our hit list we can really keep the bombing at full tilt when oil supplies are cut off," then just say it.

[TheDude]

BlisterdWhippet had some interesting remarks in the thread The future will be more akin to Mad Max than George Orwell concerning the military's plans for dealing with a major domestic crisis. Check page 2.

[Micki]

Sure they bought oil cheaply, but have they bought as much as they they used up?
After Katrina they decided to hold off replenishing SPR and in the back of my head I like to remember they still haven't topped up the SPR. Anyone who knows what the status of this is?

[joeltrout]

$this->bbcode_second_pass_quote('darren', '
')
US domestic production is still 5m bbl/day. You can run one hell of a war on that.

[joeltrout]

$this->bbcode_second_pass_quote('Cashmere', '
')
Are you worried more about the Canadians or the Mexicans invading?

[frankthetank]

Joel-

I didn't finish college, but i can still figure that our economy is pretty much dead in the long run.

Our biggest + is agriculture. I think you'll see grains continue to skyrocket right along with oil. The Saudis want bread...? A barrel of oil a loaf bastards! (they're probably nice people but they treat their women like shit).

I just watched a PBS special on Bush Sr....the guy isn't dumb and was a hell of an athlete. About 100000x smarter then his son (W). I'm sure he has to talk a little sense into junior now and again. Maybe it was his idea to fill it...who knows.

[Micki]

I just looked up the SPR stats and it indicates that the SPR is being replenished. One thing that coaught my eye was the sweet/sour crude figure. Has anyone older stats to show if the ration between sweet and sour has remained the same of if there is any trend (i.e. increasing amounts of sour).



STRATEGIC PETROLEUM RESERVE INVENTORY

CURRENT SPR INVENTORY AS OF May 07, 2008
SWEET SOUR TOTAL
280.4 million bbls 421.6 million bbls * 702.0


SPR OIL MOVEMENTS in Millions of Barrels
MONTH EXCHANGE BARRELS DRAWDOWN BARRELS NET MOVEMENT

Aug-07 0.2 0.2
Sep-07 2.4 2.4
Oct-07 1.3 1.3
Nov-07 1.4 1.4
Dec-07 1.4 1.4
Jan-08 1.4 *** 1.4
Feb-08 0.5 0.5
Mar-08 1.6 1.6
Apr-08 1.1 ** 1.1
May-08 3.8 ** 3.8
Jun-08 2.0 ** 2.0
Jul-08 2.1 ** 2.1

* Totals may change due to rounding
** Scheduled RIK Phase IVb deliveries.
*** January volumes reflect RIK phase IVa contract closeout adjustments

[Twilight]

The existence of the SPR is moot if the task it is required to perform has changed. Has anyone thought to ask whether it has?

A generation has passed and petroleum dependency has increased; thanks to JIT, box stores and suburban sprawl, oil has become far more critical to continuity of life. Public expectations of quantity and reliability of supply have increased. Military demands have increased. That quantity of oil just does not give as much bang as it did a generation ago. The US military and consumer can burn through it that much more quickly - more engines, bigger engines, needs every bit as urgent.

During the 80s and 90s the US was probably confident the SPR would tide it over through the kind of Middle East conflict it envisaged. The kinds of conflict they are envisaging now are a different matter. Has the SPR kept up with the military, its reach and mobility? Has it kept up with the ambitions of recent administrations? Has it kept up with the streamlining of civilian supply chains, ie their declining resilience to shocks?

Is there evidence of periodic reviews of the SPR's fitness for purpose? I would expect something to be published, this is a question of fundamental accountability to the taxpayer after all.

These are the kind of questions I would ask.