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Bullboard - Stock Discussion Forum Suncor Energy Inc T.SU

Alternate Symbol(s):  SU

Suncor Energy Inc. is a Canada-based integrated energy company. The Company's segments include Oil Sands, Exploration and Production (E&P), and Refining and Marketing. Its operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the United States; and the Company’s Petro-Canada retail and wholesale distribution networks... see more

TSX:SU - Post Discussion

Suncor Energy Inc > SPR release backfires
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Post by MaximusGainus on Nov 23, 2021 9:02am

SPR release backfires

These idiots do not have a clue.
Buying now, all in, full margin.


https://www.argusmedia.com/en/news/2276494-us-to-release-up-to-50mn-bl-of-crude-from-spr?backToResults=true

US to release up to 50mn bl of crude from SPR

President Joe Biden plans to draw down up to 50mn bl of crude from the US Strategic Petroleum Reserve (SPR) as part of a coordinated global release intended to reduce gasoline prices that have surged to a seven-year high.

India has separately agreed to release 5mn bl of crude from its strategic stocks.

The US release of up to 50mn bl will occur over the "next several months" and has been coordinated in parallel with releases by China, India, Japan, South Korea and the UK, the White House said. The global release of crude was needed to balance the market as the global economy has recovered from Covid-19, the administration said.

"Oil supply has not kept up with demand as the global economy emerges from the pandemic," the White House said. "That is why President Biden is using every tool available to him to work to lower prices and address the lack of supply."

The release of crude from the US SPR will occur in two tranches and begin as early as next month. The White House said Biden is prepared to take "additional action" if needed to maintain adequate energy supplies, but it did not offer further details. The administration has not ruled out an idea offered by Democratic lawmakers to reimpose a ban on domestic crude exports.

The US Energy Department in the first tranche of crude intends to offer long-term loans of 32mn bl that will be drawn down during the first four months of 2022, with the option for early deliveries in late December 2021. Participating companies will return the crude they receive in 2022-24, plus a premium based on how long they hold the oil. Bids will be due by no later than 6 December and contracts will be awarded by no later than 14 December.

The exchange will involve releases from the SPR's four storage sites, 10mn bl from Bill Hill, Texas; 10mn bl from Bryan Mound, Texas; 7mn bl from West Hackberry, Louisiana, and 5mn bl from Bayou Choctaw, Louisiana.

For the second tranche of crude from the US SPR, the administration is accelerating the sale of 18mn bl that the US Congress already required under a 2018 budget law. The Energy Department plans to release a notice of sale by 17 December at the earliest, but it did not provide a timeline for the likely drawdown.

The reserve held 604.5mn bl of crude, 252.5mn bl of sweet and 352mn bl of sour crude, as of 19 November, according to the Energy Department.

The global release of crude comes as the Opec+ group is scheduled to meet on 2 December to discuss long-term plans to raise production by 400,000 b/d. The White House has repeatedly said its preference is for oil producers to lift output, but said Biden chose to authorize a crude release as an alternative when the producing countries declined.

"Opec+ has said they are planning to release an additional 400,000 b/d starting in December, and our hope and expectation is that they will continue on that course," a senior administration official said.

Comment by NPCexe on Nov 23, 2021 9:15am
Not necessarily. They will also use covid outbreak like last winter to justify sagging oil prices short term
Comment by Oldnagger on Nov 23, 2021 9:28am
Lending oil out now and taking it back later will flatten the backwardation curve. It will have very little effect on the evaluation of Crude Producers. The share price of those producers may be another matter. Of course , if OPEC+ reacts that will be a net positive as I doubt they will make up for the unsold barrels later !! Biden's move may work short term , but I think Opec's memory ...more  
Comment by MaximusGainus on Nov 23, 2021 10:09am
True. Crude producers have taken a knock, but are now bouncing back well. Market seems to have brushed it off completely, shooting up $2. It was expecting a whole lot more. 32 'NEW' mmbbl / 4.5 months = 237,000 bbl/day  LOL! Meanwhile: - total product inventories keep dropping, - US producers may delay production spending as a result, - Oil borrowed has to be replenished with ...more  
Comment by liljohnnyjoke on Nov 23, 2021 10:46am
OPEC will likely announce the cancellation of the 400k/bbl/day increase set to start in December on Thursday this week, US Thanksgiving, when US markets closed.
Comment by Experienced on Nov 23, 2021 3:00pm
LOL - Good One!!!!
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