Crude awakening

Refilling America's energy stockpile

Good morning, resourceful oilmen. This is your Stock Market Rundown for November 13th, 2023. Thanks for tuning in for another week of hijinks. Let’s dig in:

TODAY’S TOP STORY: PETROLEUM POTLUCK🛢️

If there’s something you really need, you should set some aside for a rainy day. That’s the idea of the US Strategic Petroleum Reserve (SPR), a vast oily trove buried deep in salt caverns along the Gulf Coast.

Set up during the OPEC embargo in the 70s, the reserve is a stockpile that serves as a buffer against crude oil price spikes. The last time it was tapped was in 2022, when the Biden administration sold off more than 40% of the reserve’s Texas tea.

It was the biggest drawdown in the SPR’s history, done to stabilize prices in the face of geopolitical conflict, and drained its levels to all-time lows—we’re talking scraping the bottom of the barrel here, folks. 

The government has previously sold oil from the SPR to subsidize budget deficits, using it as a petroleum piggy-bank. This is sort of like using your emergency fund for a weekend in Vegas… not the most prudent move. 

Having the SPR’s dial on “E” is risky, because it leaves the US economy more vulnerable to any disruption in supplies. So, the US is now buying six million barrels of black gold to replenish it.

And good news for taxpayers: thanks to easing global energy prices, the oil can be bought back cheaper than it was sold. Surprisingly, US government officials are pretty competent commodity traders. Maybe they should try day-trading crypto? 

SO WHAT ELSE IS GOING ON?

That’s it for today, my friends; see you bright and early tomorrow morning. Yours in capitalism, The Axe