Suncor Energy Inc. T.SU

SPR Depletion - So What?

[Experienced]

Biden's action regarding the release of oil from the SPR on a daily basis essentially has the effect of increasing the daily production of oil in the US.  This, along with other factors, has resulted in the oil price declining for which Biden is taking full credit in the hopes that the democrats at least keep control of the Senate.  We will soon find out if this political strategy worked or not.

The result of using the SPR in this way has reduced the reserve to its lowest level in decades.  The Biden Administration has signalled that it will buy back the oil if the oil price goes down to around 80 a barrel.

The question/thinking in my mind is whether they need to replace this oil or not.  

The US oil situation right now is much different than it was decades ago when the SPR was set up.  Back then, the US was major bet importer of oil and the bulk of those imports were from the Middle East and subject to oil embargos.  This is not the case today and so this suggests that replenishing the SPR is not necessary.

The counter argument is that the Biden "Green" initiatives which are designed to curtail US production of oil in favour of electric cars and renewables will, over time, result in declining US oil production.  When you combine this with a pragmatic view of this transition, you arrive at the conclusion that there be an oil shortage and hence a replenished SPR will be necessary as a stopgap measure.  Whether this will happen or not is anyone's guess but the odds are in favour a future shortage of US production in future years.

Sooo...this suggests that the Biden plan to replensih the SPR is a sound strategy but the question becomes - "At what cost?"  The odds are pretty high that unless they can replenish it during the recession I am predicting when I believe that we will see the price of oil fall from current levels, replenishing the SPR later will result in higher oil prices in the future and fuel yet another round of inflation which is not a good thing.

Will be interesting to see how this plays out.

[Offgridtrader]

I don't know... I think they will begin to fill the SPR sooner rather than later. The release was a way to buy votes with public assets at no cost to the Democrats. Otherwise why would the release end around mid terms? Why did Biden release oil from the SPR in the first place when Russian petroleum products only made up 8% of imports to the USA and the sanctions haven't even come into

[MigraineCall]

It comes down to #crudequalitymatters. Most of the oil the US produces is light sweet, unusable by most US refineries. For decades, oil was imported from the middle east, and other countries, medium or heavy sour. Refineries were built to use these grades, and built well before the shale boom, which produces the lightest of all grades. This is why the US must export WTI, and import heavy sours to

[Experienced]

Yes absolutely!! The decision to cancel Keystone was a nod to the climate change zealots and was 100% political and 0% common sense.  The same can be said for most if not all of the Biden decisions to date. Sadly, from my time spent in the US and talking to my many American friends, none of this matters cause they will vote one way or the other no matter what and right now the majority of

[stever50]

Invest where and what is the problem right now. ?

[meritmat]

Honesly losing keystone was not the end of the world (I live 10 miles from the line).  Producers still only get Canadian select prices come.  The Transmountain is the big money maker. They get world oil price to Asia  Honesly you can't blame the States for rejecting it.  We can't even build pipelines across our own country with out them getting canceled 

[Spanito]

Bingo,  at the speed of light.   I see Suncor next week touching $38 again.  Just my two cents. And even then I won't bye in yet.   Question is where was Suncor at when WTI was at $85.00 USD Maybe we should figure out the share price out when WTI was at $80 as Biden wants it to be. "IMO what we are seeing in real time is the demise of the American Empire. &