"According to the DOE, of the 726.5 million barrels
[Ed. Note: this is down of course from the 727.7 million barrels...,
perhaps due to evaporation, leakage, et al.] in the reserve,
434 million are “sour” barrels.
The remaining 292.5 million are considered “sweet.”
The market wants “sweet” crude and will only take “sour…”
high sulfur content… crude when forced to do so.
Even then it will take “sour” crude only after material price discounts are made available.
…If there was a constriction in supply in the world
it was because of the situation in Libya, where that countries wonderful, sweet light crude
so demanded by the European refiners had been lost to them.
…the global energy market and the decision by the Europeans
and the Obama Administration to release crude oil from their respective SPRs
flies into the Saudi face.
Saudi Arabia wanted to be seen as the reason for the break in prices,
even though Saudi was going to supply unwanted, high sulfur, heavy crude to the market,
which the market clearly does not want and which the European refiners,
whose processes are somewhat less sophisticated than are the US refiners,
have a great deal more difficulty putting through their cracking towers.
…The IEA tells us that at current rates of usage, the SPR holds 75 days of import protection,
given the recent usage of 9.7 million bpd.
The DOE tells us that the average price paid for the crude in question was $29.76/barrel,
so there shall be a huge windfall profit that the government will earn
as it sells this crude into the market."