May 25, 2017

HMM. I DON’T KNOW WHAT I THINK ABOUT THIS: Trump plan to sell off half of oil stockpile sparks debate. On the one hand, the Strategic Petroleum Reserve is a creature of a time when our production was falling and OPEC was strong, conditions that have been reversed. On the other hand, we still consume more oil than we produce, and simply by existing the reserve imposes a downward force on prices, since too much of a price rise, or efforts to interrupt supply, might lead to a release.

On balance, I think I’d keep it because I’m a big believer in being prepared for bad situations. But I don’t think it’s crazy to feel otherwise.

UPDATE: In this column, Austin Bay notes the global earthquake in petroleum and says selling off half the reserve is a good idea.