A Drop in the Ocean aka GAS PRICES Going UP

The Hologram Administration telling you that releasing 2 DAYS worth of oil reserves is going go help lower gas prices....please take a moment to educate yourself on the truths of the matter.... 

https://www.reuters.com/markets/commodities/goldman-sachs-says-global-oil-reserves-release-a-drop-ocean-2021-11-24/

Goldman Sachs says global oil reserves release "a drop in the ocean" 

By Florence Tan

Needless to say, the Goldman strategist views these as "excessive concerns over the next three months, leaving the recent sell-off overshooting fundamentals due to the year-end decline in trading activity."

Separately, while Goldman concedes that on their own, the coordinated government stock releases would warrant a $2/bbl downgrade to the bank's $90 year-end Brent price forecast, it sees offsetting risks from the lack of progress on negotiations with Iran. To be sure, the restart of negotiations next Monday, November 29, will provide some sense of potential timeline to an agreement, with clear risks that Goldman's assumption for an April lift of sanctions (and February onward unwind of 60mb Iranian floating storage) could prove too optimistic. In addition, and in retaliation for the SPR release, OPEC could easily consider halting its production hikes to offset the detrimental SPR impact of lower oil prices on the needed recovery in global oil capex, likely justifying such action as prudent in the face of COVID demand risks.

In conclusion, Courvalin reiterates his view that such government intervention is not the solution to higher oil prices that are required to overcome the slow supply response of producers, something he discussed earlier this week. This instead has been driven by:

1. the damage to investors caused by oil producers’ capital destruction over the last seven years, now compounded by ESG allocation inefficiencies, and
2. the demand uncertainties of COVID, China and energy transition.

One thing is certain: neither of these two will be resolved by palliative measures such as an SPR release, or potentially counter-productive measures, such a US export ban.

One final point: while not even the Biden admin is dumb enough to consider it, some have speculated that once the SPR release is shown to be a total disaster, Biden may implement an oil export ban. The problem: this would have catastrophic consequences. As Goldman explains, a US export ban would significantly disrupt the US and global oil markets, and potentially be a counterproductive tool to attempt to lower oil prices.

The US exports 3 mb/d of crude and domestic pipelines would not be able to reroute these volumes to US refiners, which further don’t have enough capacity to process this much crude. This would leave excess US crude supply quickly reaching tank tops and forcing shut-in production, with investment and production soon to enter significant declines. At the same time, the global market would be deprived of 3 mb/d of US supply (light sweet crude that is Brent like in quality). Brent prices would therefore need to spike to push demand lower as there is simply not enough spare capacity (nor suitable crude) to replace US lost exports.

Finally, with the US an importer of gasoline from Europe, US gasoline prices would spike to curtail domestic demand, creating a negative hit to US economic activity.