The move this week by President Obama and his administration to release Strategic Petroleum Reserve (SPR) crude oil should be seen as nothing more than a political stunt.
Although an immediate short-fall in supplies worldwide was touted as the impetus, the decision to release more barrels from the SPR was more likely aimed at quieting oil prices than satiating short-term demand requirements.
The tapping of 30 million emergency barrels raises questions about the motives, timing and most importantly, the accountability of the United States government with respect to oil policy and the use of the SPR as a tool to manipulate markets.
Here is article by Poten & Partners weekly report on use of SPR Oil reserves for Political stunt / Price Control.
I have been looking at some other articles showing what bust this idea was – Crude was at $95 & went down to $91 for ~2wks but then came right back to $95 …… likely driven by speculators who probably also took options on all 30MM Bbls & made a $5/Bbl profit on a hedge.
The Poten article talks about this goes totally against purpose of SPR which is only for emergency use (especially during Gulf’s Hurricane Season!) & pushes into the realm of price control/fixing.
Don’t know if you noticed for most the time in June all major oil companies took price hit on their stock price as well.
Yes a very stupid political move that made guys causing price hike richer !!!