US oil reserves massively depleting
It is estimated that by October, the US would have sold approximately 180-190 million barrels from its reserves.
Attempting to curve the prices of oil in the US, Washington has been actively using its Strategic Petroleum Reserve (SPR) for over a year. Bloomberg reported this news on Friday and highlighted that the government cannot continue to tap into the reserves in the long run.
Bloomberg’s report showed that the US has released about 115 million barrels throughout the past year. Since mid-May, approximately 1 million barrels have been released marking a new record-high.
Moreover, if the US continues to release oil from its reserves at the current rate, then it would have exceeded the production rate of most medium-sized OPEC countries similar to Algeria or Angola.
The SPR comprises two types of crude: medium-sour, and light-sweet crude. The prior is equivalent to the type of crude pumped by Russia, most West Asia countries, and Venezuela.
Significant reductions in the amount of crude inside the reserves result from the fact that, based on Bloomberg’s analysis of official data, 85% of the oil sold by SPR over the past 12 months has been medium-sour.
At the current pace of oil production, the reserves will shrink to a 40-year low with only 358 million barrels remaining by the end of October. Last year, the SPR location in Texas and Louisiana reportedly contained 621 million barrels. According to official information, the US is set to stop extractions from SPR in October.
The report stated that “As the oil market looks today, it’s difficult to see how Washington can halt sales in October. Removing that additional supply would mean commercial inventories quickly deplete, putting upward pressure on oil prices.”
OilX Research, a company that provides advanced oil data analytics and oil market intelligence, estimates by the end of October the SPR will hold only 179 million barrels of medium-sour crude. Meaning the US would have sold approximately 180-190 million barrels of oil from its SPR.
Lost hopes to curve oil and eventually gas price
The national average price for regular unleaded gas in the United States rose to $5.016 per gallon on June 14th, according to data from the American Automobile Association (AAA), which tracks prices at more than 60,000 gas stations across the country.
Historically, the highest prices have been recorded in California, up to $6.44 per gallon, and the lowest in Georgia, at $4.49 per gallon.
Oil prices are decreasing, gas prices should too.— President Biden (@POTUS) March 16, 2022
Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31.
Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans. pic.twitter.com/uLNGleWBly
In reaction to skyrocketing energy prices and the war in Ukraine, countries around the world are pouring money into new natural gas plants, which might undermine any hope of reducing global warming.
According to a recent study, governments such as the United States, Germany, the United Kingdom, and Canada are investing in new gas production, delivery, and consumption in order to censure Russia.
The findings of the Climate Action Tracker research initiative show a rush for gas that will lock countries into the use of fossil fuels at a critical time when scientists have warned that a decisive shift to lower-carbon alternatives within the next few years is the only way to avoid climate breakdown.