3 ms·

What are the chances that this is a 4D chess move, where the US government is confident we are heading into an almighty recession soon (because they basically k

by ak_111 4y ago

What are the chances that this is a 4D chess move, where the US government is confident we are heading into an almighty recession soon (because they basically know from their contacts at the Fed that they will not stop hiking interest rate hikes for a while), and so is dumping its oil at a high price from which they intend to refill again in the midst of the recession when it is selling at a discount? This might also explain why they are intentionally selling it to China. Beware of Greeks bearing gifts.

yellow_lead 4y ago
I think the point of the oil reserve is to actually hold a reserve of oil - not to exploit it for minor gains on the US' massive balance sheet
- ak_111 4y ago
  I agree, but I am trying to give them the benefit of the doubt here that they are not just stupid or political opportunist with the country's national wealth. So I am offering a reason why they might sell it for some 'smart' reason rather than just political gains prior to mid-election. Also you can argue that the amount of reserve to hold should always be a function of how much you are forecasting future demand, so if you know with high level of certainty future demand will crash due to a recession, it might be sensible to reduce reserve.
  - OrangeMonkey 4y ago
    You give people - you and me - the benefit of the doubt. Governments deserve no such act of kindness.
    - ngetchell 4y ago
      And Governments are filled with people.
unyttigfjelltol 4y ago
Embargoes and import bans cause recessions too, and they are precisely what the SPR was meant to address. The US needs a multi-tier solution, short medium and long term. Recession only is a medium-term solution and not even the best. SPR is supposed to be the bridge to get you there and save you from worse. Perhaps a better solution would be a reserve of mothballed energy projects and equipment that can be spun up on 6 months notice or a year, not that in this political environment it would have helped.

by ak_111 4y ago

yellow_lead 4y ago

I think the point of the oil reserve is to actually hold a reserve of oil - not to exploit it for minor gains on the US' massive balance sheet

ak_111 4y ago
I agree, but I am trying to give them the benefit of the doubt here that they are not just stupid or political opportunist with the country's national wealth. So I am offering a reason why they might sell it for some 'smart' reason rather than just political gains prior to mid-election. Also you can argue that the amount of reserve to hold should always be a function of how much you are forecasting future demand, so if you know with high level of certainty future demand will crash due to a recession, it might be sensible to reduce reserve.
- OrangeMonkey 4y ago
  You give people - you and me - the benefit of the doubt. Governments deserve no such act of kindness.
  - ngetchell 4y ago
    And Governments are filled with people.

unyttigfjelltol 4y ago

Embargoes and import bans cause recessions too, and they are precisely what the SPR was meant to address. The US needs a multi-tier solution, short medium and long term. Recession only is a medium-term solution and not even the best. SPR is supposed to be the bridge to get you there and save you from worse. Perhaps a better solution would be a reserve of mothballed energy projects and equipment that can be spun up on 6 months notice or a year, not that in this political environment it would have helped.