Biden to Lower Oil Prices!

[Suave]

President Joe Biden plans to order the release of one million barrels of oil each day over the next six months from the U.S. Strategic Oil Reserve. Furthermore, he will have oil companies pay fees for their unused leases on land where they should be actively drilling for oil, this should pressure oil companies to increase their drilling for oil and thereby lower oil prices by increasing the oil supply. President Biden's aforementioned actions should keep gas prices from rising above the current national average price of $4.19 per gallon

 

[F1fan]

That'll **** of Republicans, one less thing to complain about.

It is a good move that will help the poor more than the rest of the population. Plus it will help mitigate inflation by easing delivery costs.

i still think there should be an effort to ask oil companies to lower prices (and profits) as an act of loyalty to the global affects of Russia's invasion. Oil companies are reporting higher profits.

 

[metis]

I voted Unsure/Maybe because there's so many factors to consider, especially since oil prices are largely determined on the international market.

 

[Heyo]

President Joe Biden plans to order the release of one million barrels of oil each day over the next six months from the U.S. Strategic Oil Reserve. Furthermore, he will have oil companies pay fees for their unused leases on land where they should be actively drilling for oil, this should pressure oil companies to increase their drilling for oil and thereby lower oil prices by increasing the oil supply. President Biden's aforementioned actions should keep gas prices from rising above the current national average price of $4.19 per gallon

Oil prices depend on global supply and demand, so having extra supply, prices will fall.
There's another possibility to raise supply: stop the embargoes on Venezuelan and Iranian oil.

 

[exchemist]

That'll **** of Republicans, one less thing to complain about.

It is a good move that will help the poor more than the rest of the population. Plus it will help mitigate inflation by easing delivery costs.

i still think there should be an effort to ask oil companies to lower prices (and profits) as an act of loyalty to the global affects of Russia's invasion. Oil companies are reporting higher profits.

That won't work, because most oil supply is not in the hands of major oil companies. I think when I last checked only about 7% of crude is owned (equity crude) by oil majors. The rest is mostly released onto the market by government national oil companies in the producer nations, plus a host of smaller regionals or national players. So you'd be asking a handful of companies to take a hit, which would not be enough to alter the price materially, when none of their competitors are doing so.

 

[KW]

President Joe Biden plans to order the release of one million barrels of oil each day over the next six months from the U.S. Strategic Oil Reserve. Furthermore, he will have oil companies pay fees for their unused leases on land where they should be actively drilling for oil, this should pressure oil companies to increase their drilling for oil and thereby lower oil prices by increasing the oil supply. President Biden's aforementioned actions should keep gas prices from rising above the current national average price of $4.19 per gallon

The reason they aren't drilling on those leases is that the wells are not cost effective. That's not going to help anything and it could cause further price increases. Do you really think those who own the leases would not be drilling at these prices?

Just curious, and I don't know the answer.

When the government releases oil from the strategic reserve, do the companies buying the oil pay market prices?

 

[esmith]

Does Biden plan to replace the oil he is taking from that reserve?
Obviously Biden doesn't understand the oil industry. Just because the land is leased does not
indicate that there is oil present.
Let's look at the other side of the argument:
The Red Herring of Unused Leases

 

[Suave]

Does Biden plan to replace the oil he is taking from that reserve?
Obviously Biden doesn't understand the oil industry. Just because the land is leased does not
indicate that there is oil present.
Let's look at the other side of the argument:
The Red Herring of Unused Leases

I am confident Biden will replace the strategic petroleum reserve drawdown with less expensive oil at a future date, perhaps oil from Venezuela.

 

[Suave]

The reason they aren't drilling on those leases is that the wells are not cost effective. That's not going to help anything and it could cause further price increases. Do you really think those who own the leases would not be drilling at these prices?

Just curious, and I don't know the answer.

When the government releases oil from the strategic reserve, do the companies buying the oil pay market prices?

When the department of energy publishes the notice of sale from the strategic petroleum reserve, this lowers the market price of oil bought by the buyers of oil from the strategic petroleum reserve

 

[KW]

When the department of energy publishes the notice of sale from the strategic petroleum reserve, this lowers the market price of oil bought by the buyers of oil from the strategic petroleum reserve

Do you have evidence for this, or is it just a guess. It's not a bad guess, but 1 million barrels a day is just a drop in the bucket of the worldwide oil market. America alone buys 21 million barrels per day.

 

[KW]

I am confident Biden will replace the strategic petroleum reserve drawdown with less expensive oil at a future date, perhaps oil from Venezuela.

Thus driving up prices again? If you think it will lower prices then you must think the added purchases ill increase prices.

 

[exchemist]

The reason they aren't drilling on those leases is that the wells are not cost effective. That's not going to help anything and it could cause further price increases. Do you really think those who own the leases would not be drilling at these prices?

Just curious, and I don't know the answer.

Fair point. I suspect though the reason is that there needs to be a sustained oil price, over the lifetime of the reserve, to justify the investment.

Bearing in mind a new well takes typically several years to bring on-stream, there is no point to starting now if the war will be over in 6 months and prices drop back, due to the growth in renewables and the longer term drive to get away from fossil fuel.

Drilling new wells is not the answer to short term supply shortage. The answer, it seems to me, has to be to ramp up production, temporarily, from existing sources with spare capacity (Saudi, Iran etc).

 

[KW]

Fair point. I suspect though the reason is that there needs to be a sustained oil price, over the lifetime of the reserve, to justify the investment.

Bearing in mind a new well takes typically several years to bring on-stream, there is no point to starting now if the war will be over in 6 months and prices drop back, due to the growth in renewables and the longer term drive to get away from fossil fuel.

Drilling new wells in not the answer to short term supply shortage. The answer, it seems to me, has to be to ramp up production, temporarily, from existing sources with spare capacity (Saudi, Iran etc).

Agreed.

We also need long term solutions as well. Ending the hold environmental extremists have on our governments would help.

 

[exchemist]

Agreed.

We also need long term solutions as well. Ending the hold environmental extremists have on our governments would help.

On the contrary, we need to use this crisis to accelerate the move to renewable energy. That gets rid of the problem permanently. It's a sad fact that so much oil and gas production is in the hands of unsavoury regimes who are able to use it to hold the consuming economies to ransom.

Given that oil and gas are globally fungible commodities, all it takes is a cut-back by 10%, somewhere in the world, to send the global price up greatly. It doesn't matter where the rest of the production is located, even if it's in your own back yard, you will still pay the world price for it.

 

[sun rise]

Does Biden plan to replace the oil he is taking from that reserve?
Obviously Biden doesn't understand the oil industry. Just because the land is leased does not
indicate that there is oil present.
Let's look at the other side of the argument:
The Red Herring of Unused Leases

I believe he will replenish the stockpile because I'm a Democrat. You question that because you're a Republican. Details at 11

 

[KW]

On the contrary, we need to use this crisis to accelerate the move to renewable energy. That gets rid of the problem permanently. It's a sad fact that so much oil and gas production is in the hands of unsavoury regimes who are able to use it to hold the consuming economies to ransom.

Given that oil and gas are globally fungible commodities, all it takes is a cut-back by 10%, somewhere in the world, to send the global price up greatly. It doesn't matter where the rest of the production is located, even if it's in your own back yard, you will still pay the world price for it.

We need to transition to other energy sources as they become feasible. This mad rush to renewables is a disaster around the world. In the US, there are 80 cars for every 100 people. In China it is 5 cars. China has 5 times our population. Imagine what happens when China and India reach half the automobiles we currently have in America. Even electric vehicles need energy. There is going to be a massive need for energy in the coming decades. We should be adding new energy sources but we should NOT be limiting current sources of energy.

 

[Suave]

Thus driving up prices again? If you think it will lower prices then you must think the added purchases ill increase prices.

As a. Democrat, I am concerned that gas prices be lower in six months in time for the mid term elections. As an electric vehicle owner, I honestly would not mind if gas prices were to rise to over five dollars per gallon next year when the strategic petroleum reserve is depleted,

 

[esmith]

I am confident Biden will replace the strategic petroleum reserve drawdown with less expensive oil at a future date, perhaps oil from Venezuela.

So, you are willing to support a corrupt dictator?

 

[esmith]

As a. Democrat, I am concerned that gas prices be lower in six months in time for the mid term elections. As an electric vehicle owner, I honestly would not mind if gas prices were to rise to over five dollars per gallon next year when the strategic petroleum reserve is depleted,

So you could care less what the hardship to the majority of Americans will cause by increased fuel prices?

 

[KW]

As a. Democrat, I am concerned that gas prices be lower in six months in time for the mid term elections. As an electric vehicle owner, I honestly would not mind if gas prices were to rise to over five dollars per gallon next year when the strategic petroleum reserve is depleted,

Try this.

Just five minutes.

Fossil Fuels: The Greenest Energy - Bing video