According to a recent AP report, the US Strategic Petroleum Reserve is nearly full for the first time since its inception 30 years ago. This is definitely good news, as it gives the country a bit of added security in the event of a future supply disruption. But will the end of stockpiling in August help to soften demand for oil, thereby reducing prices?
Not likely. The oil reserve presently accounts for ‘only’ 75, 000 barrels per day, and will thus have only a miniscule impact on worldwide demand, which stands at a staggering 84 million barrels per day. Thus, despite arguments that the end of stockpiling will “add to an overall trend of softening demand growth, ” it’s likely to be little more than a drop in the proverbial bucket. Moreover, despite slowing economic growth, worldwide oil demand is projected to grow to close to 86 million barrels per day over the next year. Add to this the fact that Congress is likely to increase the size of the petroleum reserve by 300 million barrels, and we’re talking about a non-event in terms of the overall oil picture. And even if the end of stockpiling did have a positive impact on prices, it seems likely that OPEC would adjust their production levels to account for it.
My best advice? Conserve as best you can. It’s the most direct way to decrease your day-to-day costs.