RE:RE:RE:RE:US Strategic Petroleum ReserveThe US has a tremendous ability to get things done when they see the need to do so
It seems likely the US will face a crisis when their SPR runs out - or sometime before
It seems likely that event will happen in 2023
Its unclear how low the SPR can get before being effectively empty - is it 1 million barrels or 10, or 50 or 100?
At 1 million barrels per day the US has 400 days or less left
If you assume the above - then what happens at the end of 2023?
That answer is what I'm curious about
1. The US may try to buy the oil overseas - much like Europe is trying to by LNG cargoes presently. Other countries will do the same. This suggests higher prices
2. The US may try to get more oil from Canada. However at about the same time Canadas tran mountain pipeline expansion should be open. To be successful US buyers would have to pay more
3. The US may try to normalize relationships with Iran and Venezuela. But China is already doing that - so there may not be additional barrels there
4. The US may increase its own drilling in some type of national mobilization. However as you mention they need to find more drilling sand and the ability to deliver it to the frac site
5. The US may impose a wind fall profits tax on oil producers - which would likely deincentivize increased production
6. The US may increase funding allocation to high entropy energy sources and make the crisis much worse - Biden will still be in power in 2023 so this is possible
There May be other possible routes
All of these lead to much higher oil prices in 2023 (H2) and 2024. May be higher still after that
This looks very positive for OBE
Canada May introduce a windfall gains tax - but OBEs tax losses should protect OBE
OBE has 14 years of reserves - with loads more to be added as they step out drilling in peace river and Viking
Its hard to guess what WTI will be at the end of 2023. $150 seems too low for a crisis with no obvious solution. $200-300 seems more like it
At the same time OBE should be selling about 10,000 obe of gas and 28,000 boe liquids
What can stop this?
WW3
More lock downs
?
What is the $US / CAD exchange rate likely to be at this time?