I’m working on some general oil stuff, all contributions about shenanigans in the energy market would be appreciated.
– Phil
Questions for Congress as they reconvene:
Why is a country that consumes 20Mb of oil a day and supposedly had "supply issues" and a shortage of refineries EXPORTING 1.5M barrels a day of refined products OUT of the country? That’s adding 7.5% to our total "demand" AND taking up 7.5% of our "tight" US refining capacity in order to flip the barrels for a quick buck in foreign countries while using 10Mb a week from our current crude inventory and removing 10Mb a week from our refined products inventories.
Why is it that, since Congress ordered Bush to stop filling the SPR on May 17th, he has added 3.2M barrels to the SPR? That is more than double the rate at which oil was added in the 5 weeks BEFORE he was told to stop. It’s interesting that an article in Platts, in which the DOE said they would stop filling the SPR on May 16th, has been removed (thank you Google Cache for saving everything!). At the time "Megan Barnett, a DOE spokeswoman, said deliveries to the SPR could actually stop earlier than the July 1 date should Congress and the Bush administration reach an agreement on the SPR measures passed this week. "The department will work to the maximum extent to defer deliveries to the SPR and comply with the law," she said."
We have 705Mb of oil in the SPR and 253M "non-speculative" barrels of oil were traded on the NYMEX on Thursday for the Month of August alone. Why can’t the government simply buy 50M August contracts and RELEASE 10M barrels a week from the SPR for 5 weeks to bring down prices. 5 weeks from now they will get their 50M barrels back from the "free" market and can refill the reserve or we can dump those barrels back on the US spot market while we buy 50M September contracts.
