The U.S. Department of Energy (DOE) will release 30 million barrels of Crude Oil, over the next 30 days. Currently, the world produces just over 87 million barrels a day (MBD) , with the U.S making up just under 10 MBD of that total. With the U.S. consuming 19 MBD, it imports about one-half of daily requirements.
The U.S. Strategic Petroleum Reserve (SPR) is at a historically high level at 787 million barrel or approximately a 39.8 day supply (787 – 30 = 757/19 = 39.8) should events shut down all imports. Crude Oil prices were already sliding, based upon forecast weakness in the U.S. economy. With supplies increasing and demand dropping, oil prices faced a double whammy and were below $90/bl at one point today.
Meanwhile, Gold is holding its own as investors seek a “safe haven” based on increasing inflation. Traditionally, the dollar, U.S. Treasury Debt Securities and Gold have been the big three safe havens.
The Master of Disaster