The IEA declared it fired a warning shot for Opec by selling of 60 million barrels of it’s strategic oil reserves. The idea is to depress the price, which dipped 7% after the anouncement. The effect on supplies is minimal.
"In a market that consumes more than 85 million barrels of oil a day, 60 million barrels is really "the proverbial drop in the ocean," says Armstrong.
The US’s attitude to the ‘standoff’ against OPEC is infantile. How is a ‘warning shot’ going to help if the gun (strategic oil reserves) has only ten bullets (roughly 800 million barrels) and if the shot has no effect whatsoever on the current profitablility of supply. The ideal price for suppliers lies between 70 and 80 dollars, but the market and speculators and real production capacity create another price. In a way it’s rediculous for a country that engages in quantitative easing to complain about inflating international prices. It seems that suicide act to get out from other Chinese debt is ricocheting in the global oil barrel right back to the biggest consumer.
If you don’t sell me more lemonade I will sell mine! See! I sold some lemonade!
