BrenBren's Journal: National strategic reserves

Yesterday, President Bush announced that he was temporarily stopping additions to the national strategic reserves. The idea is that oil would instead be put to the market, thereby increasing supply (and hopefully decreasing the price).

My question is this: How does the strategic reserve work? Is Bush's announcement actually useful, or is it only the sort of thing that sounds good?

Significance

[johndiii]

From the numbers that I saw, the SPR deposits represent only about 0.1% of consumption. So the direct significance is probably negligible. It might have a psychological impact, though. Depends a lot on what else gets done. The high price of oil seems to be mostly due to fears of a downturn in stability in the Middle East (Iran), as well as some speculation. So the roots of the problem are psychological.

If there is a genuine investigation into the dynamics of gasoline pricing, that would also help. Peo

Re:It doesn't matter

[BrenBren]

And why are there so many restrictions preventing Wal-Mart from selling cheap gas?

That's a good question. There's a local Stop-n-Shop that sells gasoline (I've noticed that they recently started posting stickers that indicate a 10% ethanol content), so there shouldn't be anything stopping Wal-Mart from doing so.

Re:It doesn't matter

[tomhudson]

And why are there so many restrictions preventing Wal-Mart from selling cheap gas?

Top 3 reasons (all unfair, but so what - its satire :-):

1. because China doesn't export gas
2. they couldn't outsource it to non-union workers
3. because WalMart doesn't like fair competition

Now for the real reason - the Rollback Happy Face doesn't understand tenths of a cent, and keeps trying to round down to the nearest 87 cents.

Worker: Okay, time to change the price. today's price is $3.52.9

Rollback Happy Face: [WH