Monday, May 22, 2023

"Joe Biden and the 'Impossible' Task of Refilling America's Oil Reserves"

Thus putting the "greatest oil trade ever" at risk.

The galaxy-brains advising the President may not have been aware that this kind of bet is similar to the game of blackjack in that the odds at any given time are dependent on the current composition of the deck, which is dependent on what cards have already been dealt, whereas in games like craps the rolls are independent of the rolls that preceded the current shake. 

What this means in physical oil markets is that the administration's buying will tend to raise the price, and, as noted in January's "White House Delays Refill Of Strategic Oil Reserve, Balks At "Too Expensive" Offers"

A couple weeks ago I was told that President Biden was the greatest oil trader of all time, trickier even than Marc Rich or the U.N.'s Oil-for-Food program. Now it looks like he hasn't closed out the position.

And as they teach in Junior Speculator School: "Don't spend the profits before you book them."

They really emphasize that....

From The Washington Free Beacon, May 20:

Six months into admin's 'replenishment strategy,' Biden has purchased zero reserve barrels
President Joe Biden in December began working to replenish the 180 million barrels he sold last year from the Strategic Petroleum Reserve. Nearly six months later, he still has zero barrels to show for it. 

Biden's Energy Department on Monday announced its intention to purchase up to three million reserve barrels as a "continuation" of the president's "replenishment strategy." So far, however, that "strategy" has seen the Democrat fail to purchase a single barrel of reserve oil. The administration first tried to purchase three million reserve barrels in December, when Biden kicked off his "plan to replenish the SPR." One month later, Biden's Energy Department revealed it had rejected all offers it received to purchase the oil because those offers "were either too expensive or didn't meet the required specifications."

Republicans have hammered Biden for his management of the reserves, which sit at their lowest levels in four decades after the Democrat last year sold 180 million reserve barrels in an attempt to lower gas prices ahead of a difficult midterm election. While Biden responded by pledging to "refill" the reserves with oil his administration would purchase this year, the Democrat has so far made no progress. If Biden's Energy Department does manage to fulfill its recently announced purchase plan, the oil would be delivered to the reserves in August, meaning Biden would have secured just three million reserve barrels in eight months. At that pace, it would take the Democrat 40 years to procure the 180 million barrels he sold.

Energy Secretary Jennifer Granholm, whose office did not return a request for comment, has confirmed that the administration will be unable to refill the reserve to the levels Biden inherited. "We will begin that process this year, but to refill the full amount is impossible," Granholm admitted in March. For Wyoming's John Barrasso, who serves as the top Republican on the Senate Energy Committee, that answer is unacceptable.

"Joe Biden treats the Strategic Petroleum Reserve like a political piggy bank instead of a critical piece of American energy security," Barrasso told the Washington Free Beacon. "He has no real plan to refill it. America has never been more vulnerable to a true energy emergency because of President Biden."

Facing the "impossible" task of refilling the reserve to its past levels—the stock held 638 million barrels of oil when Biden took office and now holds just 362 million—Biden's Energy Department is now channeling its replenishment efforts toward a more modest goal. The department in May touted its "significant progress toward replenishment," citing its role in canceling congressionally mandated sales that would have seen the department sell 140 million reserve barrels between 2024 and 2027. As a result, the department says, the reserve will be effectively replenished by 2027—not because the barrels Biden sold will have been bought back, but rather because the reserve will save barrels thanks to the canceled sales....