<Friedman calls for a Third PartyThe Oil Drum

181 comments on OPEC Declines and the World Plateau

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Oil CEO on May 3, 2006 - 12:51pm Permalink | Subthread | Parent | Comments top
I totally agree, but remember, 85 million barrels is one day's usage and 9 days of Saudi production. In relative terms that is nothing. So they sock away 85 million barrels. Then what? I mean, if anything, it just seems prudent.
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Leanan on May 3, 2006 - 1:08pm Permalink | Subthread | Parent | Comments top
85 million barrels is one day's usage and 9 days of Saudi production.

Ah, but they don't have to supply the whole world, or replace their entire production.  The rest of the world will still be producing.  They will still be producing.  There is no swing producer any more, so a few million barrels either way can make a big difference.

The question was if they are hoarding some oil.  I think they could be.  Surely they'd want to replace the oil they released during the Gulf War, wouldn't they?  Just to be prudent.

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Oil CEO on May 3, 2006 - 1:27pm Permalink | Subthread | Parent | Comments top
Tough questions. I think about them too much. Is storing hoarding? We have 700 million barrels in our SPR. Is that hoarding? I think hoarding might be(with oil at least in many cases)just stored oil that someone else would rather you be selling.

The food in my neighbor's refrigerator is just that, in fact I  don't know what's in it, nor have I ever even seen the refrigerator. But if I'm starving, hey, now my neighbor is hoarding.

The Saudis or the "speculators" weren't doing anything wrong until gas hit the still ridiculously low price of $2.90/gallon. Now they are hoarding. I think this might just be another case of Americans needing something or someone to point a finger at.

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Leanan on May 3, 2006 - 1:44pm Permalink | Subthread | Parent | Comments top
We have 700 million barrels in our SPR. Is that hoarding?

That's a big YES in my book.

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jkissing on May 3, 2006 - 2:00pm Permalink | Subthread | Parent | Comments top
The us still manages around 7mmb/d, so what is in the spr is 100 days of us production. how is it hoarding to pump from one hole in the ground to another one? Is it hoarding to not produce oil in alaska's preserve?
The us is accused of insufficient savings. the spr is one of the few places where the us is actually storing something for future use that is likely to have value at that time.
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Leanan on May 3, 2006 - 2:07pm Permalink | Subthread | Parent | Comments top
The American Heritage Dictionary defines hoard this way:

A hidden fund or supply stored for future use; a cache.  Or To keep hidden or private.

It's not really hidden, so you could argue it's not a hoard.  OTOH, it certainly is "private," in that not just anyone can use it.

Personally, I don't see anything wrong with hoarding.  As long as it's not carried to extremes, anyway.  

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odograph on May 3, 2006 - 5:03pm Permalink | Subthread | Parent | Comments top
everone hoards.  the spr is a hoard on a large scale.  keeping the car above 1/2 tank as "preparation" is hording on a small scale.  iirc, one of the factors in the 70's shortages was that everyone tried to get their cars up to F (full) at once.  200 million cars, and say 10 gallons per car, that's a sudden (fear fueled) 2 billion gallon blip in quantity demanded.

i think politicos try to argue against that kind of small sacle hoarding, and set as "bad" buying extra containers & etc.

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Prof. Goose on May 3, 2006 - 5:19pm Permalink | Subthread | Parent | Comments top
storing is hoarding in any resource constrained environment.
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Donal on May 3, 2006 - 7:43pm Permalink | Subthread | Parent | Comments top
Profiting is to Gouging
as
Storing is to Hoarding
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Twilight on May 3, 2006 - 1:58pm Permalink | Subthread | Parent | Comments top
Storage is just that, and the term "hoarding" is someone's negative judgement on the motivation for that storage.  I can see lots of reasons to store, which could be good or bad, depending on whether your the one doing the storing or not.
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Leanan on May 3, 2006 - 2:01pm Permalink | Subthread | Parent | Comments top
I think an argument could be made that they are hoarding, and we are not.

Hoarding has a connotation of secrecy.  Hoards are hidden, stores are not.  Everyone knows about our SPR, but no one knows exactly how much the Saudis have.  

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Oil CEO on May 3, 2006 - 2:06pm Permalink | Subthread | Parent | Comments top
I thought they had exactly 261 Billion barrels. That number never even changes. How great is that!?
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Twilight on May 3, 2006 - 2:09pm Permalink | Subthread | Parent | Comments top
If I have gun and I'm hungry, and you want maintain any control over your your supplies, perhaps you might want to keep quiet about it.  
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Twilight on May 3, 2006 - 2:06pm Permalink | Subthread | Parent | Comments top
It would seem the only way to store quantities of oil that are at all significant in size relative to the volumes of oil used is to keep it in the ground.  Maybe in transport, as was discussed before?

I would think that the amount you need to be able to store to affect the price would decrease as the demand gets close to the supply maximum.

I guess it all depends on why one is storing the oil.  If you really want to have a buffer, or a strategic reserve -well you need a hell of a lot of storage capacity.  If you only want to affect price as the supply/demand ratio goes to 1, you may not need so much.

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MUDLOGGER on May 3, 2006 - 3:09pm Permalink | Subthread | Parent | Comments top
Its probably just a small buffer stock for normal, commercial ups and downs
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