Metals have been down today, the day after Fed Chairman Ben Bernanke held a press conference that had no estimate of when this will all be over, or if it ever will be. He did manage to keep the “transitory” comments to a minimum. Just wish someone would ask him “what exactly are we transitioning to?”
Today the IEA announced for only the third time since it’s inception that it will release some of its oil reserves. A total of 60 million barrels of oil have been approved to be released from the reserves of the agency which consists of 28 countries. Half of the total 60 million barrells will come from the United States SPR’s (Strategic Petroleum Reserves). The reason?….. to offset the disruption of oil production coming out of Libya.
The total amount released will be 2 million barrels a day over the next thirty days…. initially.
Does that mean there is more to come?
This dropped oil prices to well below the $100/barrell mark and took metals along with it. Lower gas prices puts more money back in the pockets of American consumers during the summer months for spending.
All is well! right?
Every member of the IEA is required to hold a supply of petroleum reserves that is equal to 90 days of it’s total net imports, the average holdings at the moment are equal to 146 days. We’re safe right?
The US can afford to give half of the approved amount to keep prices in line.. we have no worries about natural disasters such as earthquakes or hurricanes that could take our oil production offline. Our President has encouraged more oil exploration and production for our country. We’re good!
Excuse the sarcasm….
This could be the catalyst that makes the extreme prices mentioned with oil, gold and silver possible.
I’m a glass half full kinda of guy, but what if the initial 60 million barrells is not enough? The IEA has already said they will re evaluate the situation in thirty days and make any necessary changes.
What if we have a horrible hurricane season that produces a Cat5 that touches groud?
What if the earth quake that Northern California is due for since the last major one over a hundred years ago happens to hit?
The United States SPR’s are strategic! In our opinion this is anything but strategic, unless it’s sole purpose is to weaken America even further. As many have said, and we agree, this seems like an act of desperation.
Take advantage of the pullback and load up on metals. The US$ has increased in value today, a perfect scenario for Americans to buy lower priced metal with a higher valued dollar.
Watch the press conference here;
Read the offical press release from the IEA here;