Completely predictably, everyone is peeing all over the IEA/White House’s big news about releasing money from the Strategic Petroleum Reserve.It’s true that it’s a drop in the bucket, and it’s also true that there’s no oil emergency (just somewhat high prices), and so on its surface, this move comes off as more politics than sound energy policy.
But that misses the point. This is a gun fired right at OPEC.
Remember, it was just two weeks ago that an OPEC meeting ended in disaster, when the various countries openly split on production levels. Since then, things have even gotten more hairy within the cartel.
Not surprisingly, Iran is already having a tantrum, saying this kind of interference in the market is totally unwarranted. Oil consuming countries have to love this.
The IEA is pushing OPEC’s buttons right now, taking advantage of the political climate to further roil the various parties. Brilliant.
One other thing: It’s just lazy to say that today’s news is having a big impact on prices. We flagged oil’s collapse much earlier, and everything risk is selling off. The market isn’t fooled.
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