Strategic oil reserve: At what price?

[jtexas]

curious, when oil is released from the reserves, does citgo or exxonmobile or whoever pay the spot price?

 

[PW2]

Re: Strategic oil reserve: At what price?

No, it is a loan, and must be repaid with replacement crude, plus interest (I have no idea what the rate is--probably the fed rate or something similar.

 

[Vlad D Impeller]

Re: Strategic oil reserve: At what price?

Thats correct, it is a loan which must be repaid.<br /><br />The President has asked for and recieved the go ahead to "borrow" oil from the international(european) oil reserves

 

[Boomyal]

Re: Strategic oil reserve: At what price?

Originally posted by Vlad D Impeller:<br /> Thats correct, it is a loan which must be repaid.<br /><br />The President has asked for and recieved the go ahead to "borrow" oil from the international(european) oil reserves

...and they should be pretty full right now. The much reviled GW has been busy refilling them since Clinton drained them down.

 

[Vlad D Impeller]

Re: Strategic oil reserve: At what price?

This initiative will not decrease the price of crude, this oil will have to go through the bottle neck (refinery) prior to reaching the pump.<br />sad to say that presently the refinery capacity is less after Katrina.

 

[jtexas]

Re: Strategic oil reserve: At what price?

Vlad I think it's for alleviating actual shortages due to crude not getting in through the Port of NO, rather than influencing price.<br /><br />Clinton released some of it, it had a slight, temporary affect on gas prices, I mean a few days. There's just not enough of it to make a price difference.<br /><br />But I believe there is enough to get us over this hump.

 

[BrettNC]

Re: Strategic oil reserve: At what price?

That's true jtexas. Once these pipelines are fully operational is when we will begin to see prices fall from these staggering levels.<br /><br />Hang in there people. <br /><br />I think that oil speculation is in a minor bubble and that may very well pop within a year from now. I think that oil prices may fall to under $2.00 per gallon as a result of this.<br /><br />I also believe that additional drilling and refining capacity in the U.S. will increase in the next 3 years. We're at almost 100% capacity right now. Energy demand is forecasted to increase in the next 30 or more years. We have no choice but to act. Not only will it increase domestic supply, but OPEC will get nervous too. I have no idea what the resultant oil prices will be if this actually occurs.