Since the plan to release oil (what was it, 1 million BPD for a month?) to tame prices, I was wondering when they will try to refill the reserves. Does anyone know? Will they (the gvt) just wait until it is back to, say, $26 per Barrel? Will that drive the prices back up when they try to? I am not very well versed in Economics so I am unsure but curious.
Thanks!
If I remember correctly, none of the oil was actually released or sold. The government just lent them out for a price that was lower than the market value at that time, and the lenders are supposed to return the oil and some interest within a few months, so the strategic oil reserve would actually grow in size. That, of course, is how it’s supposed to work. I have heard of totally uncredited rumors that some ranch farmer in the midwest somehow got hold of a few thousand barrels of oil from the reserve with the intention of stockpiling them and make a killing in the future…