Talks of More Strategic Petroleum Reserve Sales
We at TopMark Funding love to report when gasoline and diesel prices are down, but right now things are looking a bit grim, especially here in California where requirements cause the prices of fuel to be even more expensive than in other parts of the nation. To that end, analysts are predicting another potential sell off of the United States Strategic Petroleum Reserve (SPR) to increase supply, lower prices, and drive a profit for the federal government.
Details
The rumors come from Macquarie Group, a financial group in Australia that invests in big decisions internationally.
“The government will have to release oil from the SPR with a lot of aggressiveness to tame prices,” Vikas Dwivedi of Macquarie Group said. “There are not many tools available, and this is one of the most effective.”
In recent years, President Biden has been pulling from the SPR to mitigate the effects of higher fuel prices on the economy, with current levels being half of their all-time high capacity during the Obama Administration, a 40-year low as of 2022.
While this news from Macquarie Group is hearsay, the multinational financial firm is not in the business of losing money. It is likely they have poured lots of time and effort into reaching this prediction about what the president will do next. With travel increasing during the summer both for four-wheel and eighteen-wheel vehicles alike, a sell-off from the SPR would provide some much-needed relief.
A sell-off would also result in a net profit for the federal government, as it sells oil at or near record highs and can replenish the stocks later once prices trend downward. The United States would also not have to pay taxes on the gains to the IRS!
Conclusion
With fuel prices being unfortunately very high at this moment, in spite of the United States pumping oil at record rates, it is possible that, should President Biden make this decision, he is doing this right before the 2024 election in hopes of bolstering his chances of reelection.
But we are not in the business of politics: we are in the business of trucking. We hope that whatever comes in the future results in lower fuel prices so that the nation’s trucks can continue humming along smoothly.
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