SPR cost basis

[Neodymium60]

It worked in the short run.

In Jan 2021 there were 638 million barrels of oil in the SPR.  Now there are 353 million.  We went from 30 days supply to 15.    The reserves cost basis was $24/barrel.  Biden admin sold the 353 million barrels at $95.  He is currently repurchasing 14 million barrels at $76.   Current spot price is about $71.

What’s the current cost basis now?

 

[Legend]

The releases from the SPR were probably political and deeply cynical given the administrations stance on new drilling.

However I think it’s probably overly political to gripe about the average cost basis (at least to me it is). I know they could have refilled at a lower cost but don’t really have a lot of insight into it.

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Sic transit gloria mundi (so shut up and get back to work)

[Neodymium60]

Every President going forward will do the political calculus for the same thing.  Price manipulation or whatever you want to call it but it’s a first step to nationalizing a commodity.  What’s to stop them?  If they want gas lines no problem.

[Author]

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