Well, not now of course! we only pump into the strategic reserve when gas is north of $4 you know we got to help the poor little Exxons of the world!
The only problem with that statement is that it appears to be
wrong.
Do you have anything to back it up? Here's a few to the contrary:
http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
DOE - Fossil Energy: Filling the Strategic Petroleum Reserve - the Royalty in Kind Initiative
Direct purchases of crude oil were suspended by the Clinton Administration in 1994 due to the federal budget deficit and, in fiscal years 1996 and 1997, approximately 28 million barrels of oil were sold for deficit reduction purposes.
....
In February 1999, the Clinton Administration announced a new plan to resume fill of the Strategic Petroleum Reserve
and then they have a string of references to fills during the Bush admin. I seem to remember a lot of criticism of filling the reserves when gas hit the 'outrageous' price of $2.00 or thereabouts.
I don't recall gas being north of $4 in most of those times. Are you talking about US gas prices?
Oh I thought the US gov might practice LBYM.
Well, if you look at that chart, it appears that the previous admin did a Buy High, Sell Low method... Oil was lower (esp after adjusted for inflation) in 1996 and 1997 than it was when the oil was being bought to fill it. In fact, it looks like he hit the lows just about 'perfectly'. Would have been a good time to buy, not sell. I thought Hillary was a commodities expert, Bill should have consulted her!
So, did that really help 'reduce the deficit', when we had to buy it back at higher prices? I guess it depends on your accounting method, but I'd say not.
Since I don't really expect the govt to be any better at market timing than I am, I think they should just do a DCA to bring the reserves to whatever level is actually needed (which I don't have a clue on). That could be modified to avoid fills during what might be seen as clear-cut short term increases, like weather related or something.
-ERD50