The current situation may be named the plundering of the Strategic Petroleum Reserve (SPR). The Strategic Petroleum Reserve was created so the US could get oil supplies quickly in times of emergency to replace oil imports. To be clear, the US still imports oil. As of October 1, the reserve is at its lowest point in years and could only cover 50 days of imports. In a vain and totally non-strategic attempt to sweep back oil prices, the reserve is still being tapped for another 10 Million barrels in November.

I had argued that domestic production meant that the reserve could be much smaller— but that was when domestic production could ramp up. Today, the administration prefers to go hat-in-hand with OPEC (And they just announced a reduction in output double what was expected) and rescue Venezuela’s oil industry.

Future delivery prices are an indication of the direction the market may go. They specifically exclude all taxes