US officials are out with a clumsy statement about a 10 million barrel SPR release in November. The statement sounds like it will add another 10 million barrels but it’s just changing the timing. The 180 million barrels announced in March is unchanged, but some of it will be sold in November now.
Why November? For one, they had a tough time meeting the 1 million barrel per day pace of sales in the early going. Secondly, midterms are on November 8, and Democrats would hate to have an oil price jump just before then.
There’s a small blip in oil prices on this headline but I actually think it’s bullish. Some Democrats had been pushing to extend SPR sales through January or February and I think this is the White House throwing them a bit of a bone, but no more than that.
The problem for the White House and Democrats is that oil companies aren’t drilling nearly as much as they thought and if they don’t start drilling soon, oil prices will be a bigger problem in 2024 and there won’t be any SPR barrels left to release.
