Bullish oil market could complicate Biden's oil reserve refill plan

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Bullish oil market could complicate President JoeBiden's oil reserve refill plan

The rally and associated bullish factors could dissuade producers from pursuing contracts to sell crude oil at the administration's desired price of between $67 and $72 per barrel to refill the SPR, which Biden tapped to the tune of more than 200 million barrels on an emergency basis in response to the oil market volatility driven by the war in Ukraine.

Additionally, the Energy Department's pilot 3 million-barrel solicitation provides for deliveries to take place in February of 2023. WTI, indexed on the Chicago Mercantile Exchange, shows prices holding above $79 per barrel from February through July 2023, another possible reason for producers to take their chances with the market rather than compete for the government's business.

DOE's fixed-price contract tool was designed to be a shield against risk by ensuring producers have a customer in the federal government willing to buy at a set price. "Supporting prices has got an important benefit for keeping prices stable over the long term, avoiding spikes, giving industry a little more confidence about investment," added Amarnath, who was integral to the development of the DOE's repurchase strategy.

 

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JoeBiden Wait, wut? Never could've foreseen this! But really, who cares, it's not his money.

JoeBiden Then maybe he shouldn't have sold so much to the CCP.

JoeBiden

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