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Executive Director
Research Triangle Energy Consortium
George Soros was recently quoted as suggesting that the US use the Strategic Petroleum Reserve (SPR) as a deterrent to Russian aggression in Ukraine. I thought we could examine the validity of that premise. The SPR, an emergency supply of oil maintained by the United States, is currently near capacity at about 700 million barrels. In our new world driven by shale oil, a supply disruption would require tapping SPR help for a much shorter period than was envisioned when the SPR’s capacity was designed. Oil represents more than half of all Russian budget revenues and 30% of Russia’s GDP.… [more]
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Over the past month, as oil prices have climbed, rumors of a release from the Strategic Petroleum Reserve (SPR) have circulated. This week, the G7 released a statement indicating the group’s readiness “to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied.” Hurricane Isaac makes a release seem more likely, as it has suspended operations of Gulf refineries with a combined refining capacity of 1 million barrels of oil per day, according to the St. Louis Post. Dan Kish of the Institute for Energy Research said on Fox Business… [more]
View InsightA House vote on H.R. 4480, the Strategic Energy Production Act of 2012, also being cited as the Domestic Energy and Jobs Act, has brought a veto threat from the White House and the introduction of 27 amendments from Representatives. The Congressional Research Service reports that the bill would direct the Secretary of Energy to develop a plan to increase the percentage of federal lands leased for oil and gas exploration, development, and production, and would require that additional federal land be put under production if the Strategic Petroleum Reserve is tapped. The bill also calls for a streamlining of the drill permitting… [more]
View InsightAccording to a Japanese news service, The Obama Administration will call for a release of strategic oil reserves (SPR) at the upcoming G8 summit. The expected request comes in advance of Europe’s July embargo on Iranian oil. Oil prices have declined in recent weeks, and the U.S. has seen increasing crude inventories. The Administration may be eager to assure minimal price disruptions as a result of the embargo, although the White House has downplayed reports of its support for a strategic oil release. The International Energy Agency will decide if oil reserves should be tapped, and as recently as two… [more]
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In a Yardeni Research blog post highlighted by an article in the New York Times, economist Ed Yardeni argued that rising oil prices “may actually be good for the best stocks and shares ISA market, up to a point.” This is due, in part, to energy sector companies like Chevron and Exxon making up more than 12% of the S&P 500’s market capitalization. Yardeni notes that since late 2008 there has been “a strong positive correlation between energy prices and the stock market.” If prices continue to rise, however, the odds of that positive effect lasting diminishes. “At some point,”… [more]
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