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It's an insurance and once it is really needed it will be worth more than all dollars combined. In my opinion the amount of stored oil is ridiculously low with
by static_noise 11y ago
It's an insurance and once it is really needed it will be worth more than all dollars combined.
In my opinion the amount of stored oil is ridiculously low with about 8 days of world oil consumption. It can only be used to iron out minor hiccups on the world production or to power the US military and US emergency food supply for some time. Is this reporter telling us that this little safety measure isn't worth that amount of money?
- dingo_bat 11y agoI think it would make sense to compare the barrels with US demand and not global demand. I couldn't find a good recent estimate of US oil demand. Wikipedia says it was ~18M/day in 2011. That would mean about 40 days of reserves, which is pretty good, IMO.
- WaltPurvis 11y agoMore recent figures can be found here: http://www.eia.gov/dnav/pet/PET_SUM_CRDSND_K_M.htm http://www.eia.gov/dnav/pet/PET_SUM_CRDSND_K_M.htm We (the United States) produce around 9 million barrels per day, and could produce more if necessary. We import a bit more than 7 million barrels per day. We wouldn't need to replace domestic production, so the strategic reserve would cover about 100 days of lost imports. But there are few if any scenarios where we'd lose all imports -- most likely we'd lose access to only a small fraction of imports, and even that kind of shock would spike prices and thus our consumption would drop and domestic production would increase -- so the reserve can be expected to last far more than 100 days. (If we are ever in a situation where it seems plausible the reserve might be exhausted, e.g., a major global war, then extreme conservation measures will be enforced, and the discussion changes state.)