Strategic oil reserves are for national emergencies, not to cover political failures.

 ANOTHER BIDEN SHORT SIGHTED DECISION

WILL WE EVER BE ABLE TO REPLACE THESE EMERGENCY SUPPLIES

According to the Biden administration every negative consequence of their lame political decisions is now a national emergency. We are now the laughing stock of  other oil producing nations. While selling oil from the strategic oil reserve will make a headline of a short term temporary lowering the cost of oil, it will be very short term. If Biden believes that OPEC and Russia owe us some kind of favor in expanding their oil production, he is truly a fool. They have suffered for some years from low oil prices, due to the oil independence of the United States due to the Trump administration policy of oil self sufficiency. With the energy policy of the Biden administration they are now profiting from the reduced  production by the United States.

The strategic oil reserve is approximately 600 million barrels of oil. It was put into place to guard against oil shortages brought about by war, international  disruptions, weather catastrophes and other emergencies, not to bail out poor decisions by politicians. Biden announced they will start with a withdrawal of 50 million barrels. The U.S. itself uses about 18 million barrels a day. so this represents about 3 days of U.S. demand. It may be more of a political statement than a real effort to lower the price of energy to consumers.

The strategic oil reserve was filled to capacity by the Trump administration when oil was $25. a barrel. It was a very prudent effort to fill the reserve at a low price and also insure the survival of the domestic oil business that at the time was under pressure.

Oil prices will continue to go up unless this administration will change its policy of cutting domestic production. They have put into place policies that have limited production and also discouraged investment in future production. They intentionally want to raise the price of all fossil fuels so that renewable energy is more competitive. It is likely this move is going to be tailored to attempt to keep oil prices manageable until after the mid-term elections. This is a political decision, not a decision for the long term well being of the nation.

The goal of the Biden administration is to end the use of fossil fuels. Diminishing  production will create higher prices. Higher prices are not politically popular, it is that simple. So we expect that we will see the blame game continue, OPEC, Russia, greedy oil companies, price gouging, threatening price controls and export controls. All this big government force will not increase supply, only market and regulatory incentives will encourage investment and production. That is how capitalism works, an evil word in this administration.

Note: Biden yesterday talked about gouging, just another attempt to blame someone else. The facts are that the price of crude oil today is $78.00 a barrel, there are 42 gallons in a barrel, that comes out to $1.86 a gallon, then it is transported to be refined, then it transported to the wholesale outlet, Like Buckeye pipeline, then it is transported to the retailer.

Don't forget taxes in Pa. 57.6 cents  on gas, 74. 1 cents on diesel. Then add Federal tax of 19.5 cents.  

That translates to a price of 2.62 for gas and 2.78 for diesel. If gas today is $3.40 at the pump. That translates into a 78 cents a gallon to  transport fuel to the refinery, which this administration's policies are closing down, refine the fuel, then transport to the distribution point, then to the retailer, all who have employees to pay and other expenses. It also costs more to transport fuel by truck rather than pipeline. Biden wants to shut down the pipelines in this country.

If anyone has any economic sense they can see that there is no room for gouging, fuel sales are very competitive. This is why voters need to stop voting for people who have no practical experience and have no idea what they are talking about.