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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsU.S. Plans to Sell Down Strategic Oil Reserve to Raise Cash
(Bloomberg) The U.S. plans to sell millions of barrels of crude oil from its Strategic Petroleum Reserve from 2018 until 2025 under a budget deal reached on Monday night by the White House and top lawmakers from both parties.
The proposed sale, included in a bill posted on the White House website, equates to more than 8 percent of the 695 million barrels of reserves, held in four sites along the Gulf of Mexico coast. Sales are due to start in 2018 at an annual rate of 5 million barrels, rising to 10 million by 2023 and totaling 58 million barrels by the end of the period. The proceeds will be deposited into the general fund of the Treasury, according to the bill.
The sale is the second time the U.S. has raised cash from the reserve, created as a counter-balance to the power of Arab producers after the first oil crisis of 1973-74. The U.S. may sell also additional barrels to cover a $2 billion program from 2017 to 2020 to modernize the strategic reserve, including building new pipelines.
The White House on Tuesday urged lawmakers to support the budget deal, including the proposed partial sale of the SPR, saying it was a responsible agreement that is paid for in a balanced way. ...............(more)
http://www.bloomberg.com/news/articles/2015-10-27/u-s-plans-to-sell-down-strategic-oil-reserve-to-raise-cash
global1
(25,246 posts)Or do they know something that's going to happen to raise the price of oil during that time period?
NV Whino
(20,886 posts)It will create a need for Saudi oil. Remember the guys who are going bankrupt due to the current price of oil? That will elevate them to the only game in town and raise the price of gas again.
I'm no financial genius, so I could be totally off the farm, here.
global1
(25,246 posts)to provide a break for the American People when the price of oil is at its highest?
karynnj
(59,503 posts)Saudi Arabian oil. I would guess that we would sell it in smaller enough quantities at each time that we don't affect the global price much, but if there is an effect it would be to lower the price as we increased the supply available.
edhopper
(33,576 posts)and if they are buying now when it is low, selling after the Saudis are forced to raise prices (they will need to, as another thread here has shown) it could turn out a good deal.
karynnj
(59,503 posts)--- which eventually has to happen unless we want a catastrophe.
edhopper
(33,576 posts)another topic for another thread, I know.