A Drop in the Barrel

News today that the US is releasing 50 million barrels of oil from the strategic reserve. Market response: Oil price is up 2.6%. Why? 50mm is 2 days of demand for the US and 1/2 a day for the World.

On top of that, now OPEC is upset that the US is trying to lower oil prices, which is naturally bad business for those countries.

There are a few hard truths that the US/CA needs to come to grips with:

1. This is not 1973.
   
2. Oil prices are actually not that high. $78 is not even REMOTELY close to a record high. From 2010 – 2014 oil was much higher than it is today. It just seems high because of COVID shocks last year.
   
3. There is not much in the short-term that anyone can do to impact oil prices.
   
4. Gas prices nationwide are the correct price given the price of oil.
   
5. Prices in California (as I posted last week) are off the charts for tax reasons.

This move today will make no impact when you go to fill up.